Marks & Spencer is the UK's top merchant and is posted in the FTSE 100 of London STOCK MARKET. The company has expanded its business in numerous global markets. The business has its products and services in the food, clothing, hosing, and financial service businesses. The project is dependant on the business strategies employed by the firm to grow its business in the current global and home market. The project is based about how the writer analyzes individual products (Strategic Business Units) and their overall business by using business tools like Stakeholder Evaluation, Porter's 5 Pushes Analysis, Value Chain Research, BCG Matrix and Ansoff Matrix. After collecting the necessary date from the individual business tools the date is prepared and used to get new Business Strategies for M&S's businesses. Once the business strategies are drawn then the author can make programs on how to use them in M&S's businesses. The brand new business strategies will help M&S to boost their business processes and help them to expand their businesses in new market segments.
Marks & Spencer's has many tactical intends to accomplish its Eyesight. They will be the number one vendors in UK so the management has adopted new milestones how to perform business by creating less damage to the environment. They have started their project 'Plan A' where the firm will try to reduce the damage to the surroundings as less as possible by their business operations. One of the main milestones is to keep up existing customers and gain clients for their products, that they have special deals and techniques in form of membership cards, free shipment charges in home market and savings during special situations for their devoted and new customers. They have began conducting their business online with help of new ICT systems which includes helped them increase their sales and serve their customers better and efficiently. There is also many quality adjustments and strategies to improve their business processes and keep maintaining their position in domestic and international markets.
Marks & Spencer has six main objectives which are Profit Maximization, Increase Sales, Market Management, Offering TOP QUALITY Services, Development and Incentive Shareholders. Earnings Maximization is the main objective of M&S. The management has made programs to maximize their profits by increasing their income from various different businesses and by reducing their cost by keeping away from wastage of resources (fresh materials, labor, etc). Marks & Spencer's earnings in last 2 yrs was in 2009 2009 it was 506. 8 m and this year 2010 it was 523. 0 m. Increasing Sales is also one of the most important business goal of M&S. To be able to increase sales they may have expanded their business ventures globally by joining new markets and by updating their products with quality adjustments and tests they could meet their existing customers and catch the attention of new customers for their different business ventures. M&S can increase its turnover from 8, 164. 3 m in the entire year 2009 to 8, 567. 9 m in the entire year 2010. Market Management is one of the business enterprise aims of M&S, M&S is the most significant shop in UK therefore one of its business goals is to keep up market command by frequent reviewing of the past performance and of their competitors. They have drawn plans about how to be the leaders of international marketplaces by diversifying and improving their products based on the taste of the local customers. M&S has made frequent efforts to contend with the local competitors in international markets and their international turnover has increased from 897. 8 m in the year 2009 to 968. 7 m in the entire year 2010. High Quality Services is one the business goals of M&S, they have always maintained a high specifications in quality of goods and services which has kept them together with the UK suppliers for many years. The management is making new plans on how to evaluate and improve their services and goods to keep their high requirements to which others can compare and improve their performances. Progress is one the key business aims of M&S as the management recognizes the value of development that is if the organization doesn't grow it will not survive in the current competitive markets. Markings & Spencer has made maximum expansions from the year 2001 after a new board was set up. M&S has broadened its business by giving franchise to residents in various countries and has effectively expanded its business in more than 35 countries internationally. Prize Shareholders is also an important business goal since from the listed public company in London Stock Exchange. It is in FTSE 100 list and like the rest of the companies M&S has declare dividends each year based on their profits in order to keep a healthy romance with their shareholders. The shareholders will be the backbone as they have invested large amount of liquid riches through IPO's in M&S to allow the firm to handle its business with calculated risks.
The Threat of Access is one of the key areas in which the firm requires unique strategies how to stop the new businesses from joining their market portion. The organization either has slash down their prices with an extend that new organizations cannot type in their market or have such a solid brand value that the clients stay loyal to their products. M&S is able to maintain its brand loyalty and keep maintaining itself as UK's number 1 retailer giant. M&S has organized a long term strategy for progress which hinders new businesses to type in its market portion. The company is thus effectively in this field of business. The Power of Potential buyers is the area of business that handles how the organization satisfies its customers with products that are of better quality and are in lower price range. The clients contain the bargaining electric power as there are large retail giants like Tesco, Sainsbury, Asda (Wal-Mart), etc to provide their needs. The quality and cost range of M&S's goods and services continues to be better than the rest retail giants so they are able to keep customers faithful with their products. THE ENERGY of Suppliers is the region where the firm deals with its suppliers for its raw material. M&S has materials only from local suppliers and being that they are few in quantity M&S has less negotiation power. The suppliers of M&S enjoy the ability of controlling price of the raw materials. This is one area where the firm can really improve its business process by shifting their manufacturing systems to places where the amount of suppliers is more and they can have an improved chance of bargaining with their suppliers. The Risk of Substitute is portion of business that offers in planning on how to avoid customers from moving over into services. M&S's management and R&D team are in charge in updating their products so the customers continue to be satisfied and not switch over to an alternative product made by its competitors. The R&D division is so successful in its work that not only they could meet their existing customers but also appeal to new customers for their product line. Competitive Rivalry is the area of business in which the firm will keep a close check up on its rival businesses and plans how to contend with them in a competitive market in a profitable manner. M&S is able to maintain high benchmarks of goods and services which allowed them to remain as the major retail large till time frame in UK.
M&S has used the BCG matrix from time to time and have used the info sensibly. The matrix has helped these to permeate in new and old market segments with various new products and services. The products of M&S have the ability to capture huge market segments in high growing business. M&S has a diverse selection of products and services so they have got allocated their resources in the star products. They have exposed many new shops in primary areas for retail and helped their question tag products in becoming star products. M&S has expanded their business internationally so their celebrity products are able to capture new marketplaces easily. M&S management has reduced their dog SBUs and has diversified those money towards superstar products. It has helped the firm to be near the top of the stores in UK and a major rival in other international marketplaces. Presently M&S has only cash cow and celebrity SBUs in market. The cash cows aren't giving much come back due to the recession and sluggish development of global market but the star products are doing exceptional well for their high reputation.
The BCG matrix helps the company understand their products life routine and allocation of resources in the SBUs. BCG matrix has been one of the most crucial business tool for M&S in studying their performance from time for you to time
http://www. scribd. com/doc/24329524/Introduction
3. 2 Ansoff Matrix
Igor Ansoff experienced developed the Ansoff Matrix in 1941 and was initially posted in 1957 in Harvard business review. The Ansoff Matrix is a strategic marketing tool that links a firms marketing strategy using its basic strategy and describes the options available to the firm if indeed they wish to develop, improve profitability and earnings. These options show to how to control the introduction of the merchandise range. It mainly presents four alternative progress strategies in a stand (matrix) which are market penetration, market development, product development and diversification.
Market Penetration is a growth strategy for existing products in existing market. The business tries to increase its market share by increasing the deal of its existing product in its market by using new marketing strategies. Market Development is a growth strategy for developing new markets for existing products. The main purpose is to find new markets domestic or international for the businesses existing product. Product Development is a rise strategy for new product in existing marketplaces. The firm must develop services and release them in their current market to capture market show. Diversification is a growth strategy for services for new marketplaces. The firm has to launch new products for new marketplaces in order to extend their business in different markets. This is one of the most important development strategy as the business has to review the flavour of clients and design their products to be able to capture market show of a new market.
Marks & Spencer uses Ansoff Matrix to analyze their overall business portfolio. Since M&S is one of the greatest retailers in global market they use all the four expansion strategies of Ansoff Matrix in their business. Market Penetration is utilized by M&S to catch the attention of customers and make sure they are loyal with their brand by offering good quality and services. They may have special deals and customer commitment programs during special occasion which helps those to attract new customers. The firm has opened many outlet stores in their captured markets to be able to increase sales with their existing products. Product Development is one of the main growth strategies employed by M&S, the company develops it services according to the change popular. This has helped the firm to grow rapidly over the years. Market Development is also a rise strategy used by M&S as they are extending their business globally. The company has opened up many new retailers in many other countries around the world. Their products have such popular that they are able to expand their business in many countries. M&S is a cash wealthy company so that it can easily get new emerging markets by opening new stores at leading areas in several counties. Diversification as a rise strategy is also used by M&S as they develop new products for new customers to accommodate their needs. The R&D department of M&S is highly efficient in developing services for new targeted markets of the firm. M&S when gets into new market they improve or make their products based on the taste of their clients.
M&S uses both Ansoff & BCG Matrix to investigate their business procedures and to draft business approaches for expansion in existing and new markets. The analyzed data is employed effectively by the management and M&S is growing its business over the years successfully.
Develop & assess possible alternative approaches for the organisation you've chosen.
4. Alternative Strategies - Growth
Growth strategies are used by companies when they try to gain large market talk about, even at the trouble of short-term earnings. The expansion strategies can be grouped into four types and they are market penetration, product development, diversification and market development.
Marks & Spencer also offers to use alternative strategies to expand their business in this competitive world market. The management has to use all their resources to plan new strategies how to work with their current products, current market segments, services and new market segments, to be able to ensure there is maximum business development.
4. 1 Different Strategies utilized by Marks & Spencer
Marks & Spencer uses a mixture of many ways of draw up ideas for expansion. M&S getting a diverse business may use many strategies to increase their business in local and in international market segments. The strategies used are market development strategies, market penetration strategies, product development strategies, and diversification strategies.
4. 1. 1 Market Development Strategies
Marks & Spencer's management can grow their business by using market development strategies where they can grow their business in new countries. The products of M&S are of high quality therefore their reputation can help the organization easily develop into new marketplaces. The brand value of M&S can even help the firm to endeavor into new market portion and attract new customers as the products are of good quality and are located at competitive prices. The meals, clothing and house ware businesses of M&S may use this strategy to develop and reap huge benefits for the company.
4. 1. 2 Product Development Strategies
M&S uses Product Development Technique for its house ware, food and clothing business. In food business M&S has altered the product packaging to serve the needs of customers who buy in volume and in small amount. In clothing lines they introduce a fresh collection according to the change in fashion to get customers to their clothing business. House ware being the greatest business the company is launching new products frequently to stay near the top of other retailer in UK.
4. 1. 3 Market Penetration Strategies
M&S uses Market Penetration strategies for most of existing businesses. This plan has helped M&S to stay at the top of all the sellers in UK. The clothing and food business use strategies like customer devotion and value improvement strategies whereas the hose ware and financial service businesses use market talk about growth ways of increase business.
4. 1. 4 Unrelated & Related Diversification Strategies
Relative diversification is the introduction of a new product line for the new market. Related diversification is of two types horizontal and vertical. Horizontal diversification is development of something which can be an alternative to your present product and Vertical diversification is when the business becomes its company or distributor.
Unrelated diversification is the development of a fresh product without any relation to the marketplace or the industry where the company conducts its current business.
M&S uses comparative diversification strategies for its food and clothing business. For both businesses it uses horizontal diversification strategy by which it develops new food and clothing products as per the change in preference and tendency of people. Lately M&S has started its business in Financial Service area this is a full new business therefore the growth of the services are designed by unrelated diversification strategies. Which means organization has used many ways of diversify and develop its business in order to support in the competitive market.
The collection of strategies by the management has helped the firm to reap exceptional benefits and has helped the company to keep up its position at the top of all the shop giants in UK. The strategies used in global markets are also successful and the expansion rate of the company is huge in foreign marketplaces. The products and services are of high net worth therefore the firm can easily use the designed strategies to expand their business in local and international marketplaces.
Outline an implementation arrange for the chosen strategies in question 4.
5. Progress Strategies Execution for Marks & Spencer
Many of the plans for the strategic growth talked about before are already applied by the company. New arrange for development in new market segments (market development) is usually to be drawn and implemented to ensure strategic development for clothing business.
5. 1 Market Development Strategy Execution for M&S
M&S has to develop and implement strategic ideas for capturing markets in various countries. M&S has recently broadened its business in many countries and their products are capturing huge market shares. Seeing remarkable international expansion M&S should take new marketplaces as their products are of good quality. The brand new markets will help the clothes business increase internationally and M&S brand image will further appreciate. The steps for planning market development strategies are planning, organization structure, human resources, annual business plan, monitoring and control and linkage.
Planning is the first step for developing a market developing strategies. The organization must first decide which new market they have to take and what product line they should launch for their new market section. A detailed research on the flavor of their new customers needs to be conducted and then consequently the firm needs to launch their existing or new product line. Organizational Structure must be chosen by the firm before they layout their business basis in the new market. Usually the company offers franchise to the local people to start new store in new countries, this task helps in lessening risk and the management is in the hands of the franchise holder. The company still has control over the layout of the store and pricing of the products. Human Resources of every new store is used care by the franchise holder but M&S organizes workshops to train and help the staff to build up new skills. This helps M&S to get employees which can serve the need with their customers effectively. Annual Business Plan helps the organization to calculate or forecast their sales in the new market. The company and the franchise holder have to allocate resources in line with the annual business plan in order to ensure business expansion. Monitoring & Control is a crucial part of making the home based business successful. M&S must monitor how the employees are trained to provide their new customers. The firm has to check if the products are properly displayed in their new stores. They need to perform regular surveys to check on the inclination of people and develop services predicated on the research of the data collected. The firm has to give franchise to the people who'll execute business ethical if not their brand value will decline for the reason that market section. Linkage is when the organization continues a close check on all the activities and makes certain that all the functions are conducted in the resolved series regularly to ensure business expansion.
M&S may use this growth strategy to develop a new market and by implementing this strategy it can develop its business in many part of the world. One of the business goal of M&S is to develop therefore growing in international market is actually profitable as M&S has made regular efforts to contend with the local opponents in international marketplaces and their international turnover has increased from 897. 8 m in the entire year 2009 to 968. 7 m in the year 2010. The international market of M&S has shown a tremendous growth therefore M&S should make full use of this course of action and increase its business in new marketplaces. This plan also gives the firm the advantage of developing new products for their new market sections. The brand image has helped the firm to expand in many new markets therefore M&S should utilize this growth strategy to develop new markets.
Quinn (1980, pg. 3) identifies Business Strategy as the style that integrates an organization's major goal, guidelines and action sequences into a cohesive total. A well produced strategy helps to marshal and allocate an organization's resources into unique and feasible posture predicated on its relative inner competencies and shortcomings, anticipated changes in the surroundings and contingent techniques by intelligent competitors.
The creator has used many business measuring tools (BCG Matrix, Ansoff Matrix, Porter's 5 Forces Analysis, Value String Evaluation, Stake holder research, etc) properly to collect relevant data on each one of the SBU's and on overall business. The data was refined and used to form new alternative development approaches for M&S. The development strategy if used by the organization can help them expand their business and also to develop new product lines for new market segments. Therefore the business strategies recommended by the author in the project are relevant for the organization if they want to grow their business in current global market and hold on to their position near the top of UK's shop list.
Mooij, M, 2009. Global Advertising, 3rd Edition. SAGE
John, R, Gillies, G, 1996. Global Business Strategy. Cengage Learning EMEA.
Johnson, 2008. Checking out Corporate and business Strategy. Pearson Education India.
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History & Release of M&S taken (online), Available at: http://corporate. marksandspencer. com/aboutus/company_overview (Reached 15th April, 2011)
Mission & Eyesight taken (online), Available at: http://www2. marksandspencer. com/thecompany/our_stores/world. shtml (Seen 15th April, 2011)
Definition of Strategic Objective taken (online), Offered by: http://dilipnaidu. wordpress. com/2010/05/06/strategic-intent/ (Accessed 15th April, 2011)
Objectives of M&S taken (online), Offered by: http://bizcovering. com/major-companies/a-case-study-on-marks-and-spencer/2/ (Accessed 15th Apr, 2011)
M&S 5 Years Records considered (online), Offered by: http://corporate. marksandspencer. com/investors/fin_highlights/five_year_record (Seen 16th Apr, 2011)
Stakeholder Examination taken (online), Available at: http://www. businessdictionary. com/definition/stakeholder. html (Accessed 16th April, 2011)
Porter's 5 Makes Analysis (online), Offered by: http://www. 1stessays. com/samples/businessanalysis. pdf (Utilized 16th April, 2011)
BCG's Matrix taken (online), Offered by: http://www. managementstudyguide. com/bcg-matrix. htm http://www. scribd. com/doc/24329524/Introduction (Utilized 17th April, 2011)
Ansoff Matrix taken (online), Offered by: http://www. ngfl-cymru. org. uk/ansoff_matrix-2. pdf http://www. businessdictionary. com/definition/Ansoff-matrix. html (Accessed 17th April, 2011)
Alternative Development Strategies used (online), Available at: http://www. businessdictionary. com/definition/growth-strategy. html http://paulcurtis. files. wordpress. com/2011/03/growthstrategymatrix. jpg?w=500&h=446
(Accessed 17th Apr, 2011)
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