Marketing Analysis Of Marks And Spencer

tradeing Analysis Of mark And SpencerSuccess is the ability of a firm to do well than its competitors. By nineties MS had been massively prospering in terms of merchandise sh are increase. Therefore, we can transport up that the firm was overtaking its competitors in term of commercialise share and profit. This was attained by different approaches. The attach tos maturity, strategies, philosophy and control of the value set up were all vital to its success.Strategy of product and service differentiation was the master(prenominal) feature for MS . The development of grease St Michael and its creation as a sign of British manufactured quality, at a sensible price were subjective to the company. By providing a welcoming, co-operative service that guarantee superior shopping comfort and handiness to customers, distinguished MS from further postgraduate street retailers. The company readily turn into a household name, with a solid corporate image, that could be trusted upo n to give true(p) value for money. This prepared it stand out from the backup man and therefore much fruitful.As MS turnd, and it advanced along its experience curve, it was able to benefit from an accumulation of experience, process variety, economies of scale and improving customer brand allegiance (Porter M. 1980. pp163-164). This assisted the company to crawl in improved service at a low cost, to customers who were little price-sensitive, thus assuring success.Simon Marks, well-known as competitive Leader for his expertness over the business and his thought. His firm thoughts and realization of affectionateness determine provided the company a strongly devoted ethos culture. This ethos was keep with the put on of staff that would fit-in and turn into part of the family. caters of MS were very faithful, which meant that they could be trusted upon to provide the true level of service to the clients. They actually were Customer oriented through the start of the busin ess to be crucial to the success of the company. MS deployed a very thoughtful style of strategy, which empowered whole control of all features of the business. Thru its was efficacious years, the company kept and remained true to the durable pith values, firstly set in place by Simon Marks. Every store manager tracked primal route on all matters with devotion to rules and the company fundamental ethics and values. This confirmed that the MS image was steady throughout the nation and assisted to countenance the business identity. The culture admired the policy and strengthened the companys victory through differentiation. Simon Marks recognized the grocery necessity for great quality at comely price. It was his trust that most of the British suppliers could arrange for these items and he rapidly forged c retire ties with his belief suppliers. This connection was so vital, it was incorporated in the companys central principles. Suppliers had to kick products of the high qualit y and description and this assisted to give MS a large manufactured goods range that customers could trust on. The locked-in suppliers, captive distri exactlyion, owned retail outlets, hard-hitting in-house service network and strong after sales support meant that MS had a strong vertically integrated system that controlled most of the value cosmic string (Porter. Ibid. p128). Guaranteed products from a assured chain assisted make MS so fruitful. The achievement of MS was non only owed to the company itself, a certain(a) amount of good fortune is in add upition required for any business to succeed , creativity, hard work and trade 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 more than probable that the company would not use up been a achievement. MS was so effective because it occupied an area of the retail groceryplace that n o one other had. It distinguished itself and continued high criteria in product quality and customer deal whereas keeping price reasonable. MS managers were devoted to the company beliefs and operated closely to produce strong links with British suppliers. marketplace Penetration i.e. existing products in existing grocery stores.Additional product lines wee-wee been offered in the food and clothing categories to gain more market share. MS has introduced a interior designer collection with the aim of entering different instalments of the younger (Thompson, 2001). Also, different product ranges such as cosmetics, furniture, books and CD, financial services etc have been introduced. current marketing events has been introduced by MS such as get uping advertising, employing an outside agency for public 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 smart(a) fabrics and colours, increasing product offerings (MS 1998 yearbook report).Product suppuration i.e. refreshed products in existing markets.MS offers customers a more extensive choice 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 new selling opportunities for unique product ranges (MS 1998 annual report).Some innovative products are added such as washable silk, jumpers and etc. (MS 1998 annual report). Furthermore, MS introduces sub brand designer in put to supply a collection of womens clothing for the fashion conscious woman (http//marksandspencer.com, 18/03/02).Market Development i.e. existing products in new markets.MS plusd selling space by 410,000 sq ft in 1998 through opening 4 new stores, extending 16 stores and purchasing 19 selected stores from Littlewoods (MS 1998 annual report) in order to upgrade and make the store s more pleasure experience for the customer. Also, MS has opened a payoff of stores at UK railway station and airports.MS has tried to enter into the young segment by offering more fashionable clothing and introducing nigh designer brand. Moreover, MS is now offering a mail order for busy good deal and those living in remote areas. Mean while the company continued to established markets in Western Europe, Canada, USA, and the Far East, this was now being done via a franchise method.Diversification i.e. new products in new markets.Apart from its core products food and clothing, MS developed a new strategic focussing within the UK through its diversification into financial services, home furnishings etc. (Maureen Whitehead, 1992). MS as well as change into US retail food market by purchasing Kings Supermarkets (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 r eputation that they had gained since the 50s by only selling quality items at value pricing.Current Strategic SituationDue to self-made again MS must 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 pass on wrong is that they lost touch with the developing market and hence requirements of customers customers needs transformed but they didnt. To re-establish this success MS must certify they know the market exceptionally well and reconcile what section of the market they wish to acquire. By going back to their original rudiments, inspecting their existing strengths and deciding on a market segmentation strategy that best matches these strengths, MS should be able to become moneymaking once more. Continuous satisfactory market research must be accompanied t o certify MS does not lose touch again with their purport market as another blunder could critically damage the organisation. Today MS is operating in a super competitive market where purchasers have a comparatively high percentage of disposable income and are spending large amounts. This gives them high negotiating power specially since they are well knowledgeable about aspiration and so it is distinguished 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 minimum standard and a market accumulation slip had established. The large number of substitute products in the market today also helps makes it this highly competitive atmosphere there are more other retailers having competition for both the top and bottom end of the market share. This necessitates MS to have an aggressive marketing strategy to recapture market share. MS nee ds to take opportunities which form on its current strengths and be cautious about current threats that could potentially troika to more difficulties. By structure on existing strengths or core capabilities MS should goal to strengthen its market place and form new competencies earlier boarding on a noteworthy expansion program. once a number of strong core competencies have been established MS can consider dangerous growth.SWOT AnalysisSTRENGTHSMS became Well cogniseMS has composed a Good image for their customers.Their store locations were prime.Clothing is a requirement but several peoples also purchase a wide-ranging diverseness of turn to match their different events or desires.Urge purchasing accounts for a high share of sales.Customers are continually purchasing new clothes to charter their wardrobes, either for the reasons of fashion or to switch worn-out stuffs.The UK industry is stronger in design fashion.Less common for people to get prepare their personal clothes than it was in the past.Costs of manufacture are dropping down as manufacturing is progressively being moved to inexpensive places around the world.WEAKNESSESSevere rivalry 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.Large chains dominate the retail sector and the only way to gain share in this mature market is to success to win customers from competitors.Speedy fashion variations can render items archaic very quickly.Outmoded mail order collections are losing ground, as it is difficult to keep well-informed of fashion. Internet selling is unlikely to be significantly successful, as customers like to try on clothes and see the superiority of fabric and workmanship.Sales are periodic, with the greatest spending taking place in the collect 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 quiet 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 products 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 go out not only want more clothes for work but are also more probable to have the financial freedom to create clothes purchases.The indu stry 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, allow 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 issue 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 extirpation back on overall expenditure in this sector.In the current market environment a quantity of choices are open to MS now. These acknowledgeFounding a strategic union with another organisationThis would involve an unwritten agreement with other clothes retailers not to encroach on for each one others market share. Thi s would stop MS to regain strength in its original core business and so ensure it is in a better military strength to possibly expand into new markets in the future.Dis-investmentsIn order to focus 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 focus only on core business until its market position is regained.Purchasing 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 observe them to be of highe r 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 escort at choices for product innovation. By introducing absolutely new and original products they can further strengthen their market segments. After this has been end MS should begin 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 entirely 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 b y founding a strategic alliance with other organisations not to violate on each others market for the time being. splendider competitors should not be attained at this stage until MS is in a sturdier financial position.Strategic Direction for the future congenital DevelopmentMSs will have to invest in training led to enhanced performance of supervisors and junior management. 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 revolutionize the store with modern look. The upgrading on design and layout for the store will have been introduced in an attempt to gain customer demands on convenience and to increase more shopping attractive.doneAcquisitionsMS have to buy more stores as part of the growth class this will allow the company to doubly the number of locations. The store bought will then be altered into MS corporate style, with specific departments of the MS business (Welwyn Garden City).Joint DevelopmentThe family 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 visible 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 management team Loyal customersIntangible noble product value Good image, so it will converted into high reputation Buyer and staff loyalty They will must have some Strong relationships with suppliers Highly expertise expertise knowledgeHuman Supply-chain management expertise in outsourcing Outstanding services in purchasing and merchandising Small hierarchy that will allow outstanding communications between head office 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 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 digest could be used to identify the organisational capabilities.Value Chain Analysis offer ACTIVITIESFirm Infrastructure Subcontracting with suppliers as well as outsourcing domestically and internationally Development of financial services such as availability of credit card gameTechnology Development MSs technologists working together with suppliers to gain knowledge about product development (e.g. with Dupont-Lycra) EPOS system to help MS improve productivity so that it can respond faster to market changes Customer ordering system (mailing system) Having its own website for online selling, which allow customers to see products a nd service onlineHuman Resource instruction Good appraisal system for employees such as store Management training program and so on (Morgenstein Strongin, 1992) Specialist advisers in key departments Staff service initiativesProcurement Minimising the environmental impact of their operations and merchandise A well established supply base, with a high product specification standards primary(a) 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 knowledge and information throughout the supply chainOperations Exclusive quality control in the operation process Dealing direct with manufacturers instead of through intermediaries, understanding and controlling products from raw materials to finished goods Subcontracting production with very tight conditions to suppliers The costs of stockholdings we re carried by the supplier Working across within franchisesOutbound Logistics Franchise agreement overseas such as Greece, Indonesia, Thailand and so on Good chime in locationMarketing and Sales Comfortable shopping environment High quality products with good value for money Wide ranges of products and servicesServices pass the highest standard of customer care(Johnson Schole, 1997 Case Study)The value chain analysis helps MS identify the way to cooperate across different functions in the chain and then add more value to products and sustain competitive advantages.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 belowStrategySuitabilityFeasibilityAcceptabilityDifferentiation*** Do NothingWithdrawal***Market Pene tration**Market Development***Product Development**Diversification*Internal Development***Acquisition**Joint Development***DifferentiationThe company had serious 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 continuous 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 competitive market place.WithdrawalAccording to the company inability 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 switch 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 improved MSs profitability 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.Inte rnal DevelopmentThe modernization 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 excitement to its product lines and therefore enhance the shopping experience of their customers. The failure of MSs suppliers to develop possible new products has been viewed as a failure in their relationship which had to be addressed without delay. The problem was due to the past attention had been given to quality and efficient 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 wanted from the relationship. When the customers feel satisfied then will be prepared to commit 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 546m in 1999 and the share price declined from 6.65 to 4.61 (The Chartered Institute 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, change s 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 internet 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. fight back Office, 2001)http//www.coursework.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 unclear because they were trying to do everything to maintain its competitive advantage. They are using orthogonal s trategies such as cutting costs (cost leadership) as well as trying to use differentiation focus by entering different break 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 fickle customers, changing fashions and intense competition, a sustainable competitive advantage is difficult to maintain in this particular(prenominal) sector. Although MS has plenty of attractive retail space and George Davies brought a magician, however, MS need to have some dramatic change in order to arrive 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 ide as 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. peeled strategies are in Place an upmarket clothing line has been introduced, returning to selling only own-brand products, stores have been revamped, top management appointments made, the utilization of Microsoft BizTalk serve and windowpane 2000 serve and opening out-of-town stores to shift surplus stock. The difficulty for MS is achieving the right balance between the corporate values that gave it its strong market position, and the innovation that is required 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 happening 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 l eading 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 devising An Integrated Approach, 2nd edition, Financial Times, Pitman Jobber, 2001, Principles and Practice of Marketing, 3nd Edition, McGraw-Hill Publishing Company Johnson, Scholes, 1993, Exploring incorporate Strategy Text and Cases, 3rd edition, scholar Hall International (UK) Ltd. Johnson Schole, 1997, Exploring Corporate Strategy, 4th Edition, Prentice Hall Kim Warren, 2002, Strategic Performance connecting to the fundamentals of business dynamics, London Business take 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/education/2001/ms.pdf, 24/04/02 http//marksandspencer.com, 18/03/02 htt p//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