Strategic examination of Grades and Spencer

Marks & Spencer is one the UKs leading vendors, having 600 stores in home country and even more than 200 stores across the globe. Michael Marks began the penny bazaar stall at Leeds in 1884. After Michael Marks Simon Markings' became a chairman of M&S in 1926 to 1964. M&S is well known for its quality and styles (Hawkesby, 2008).

M&S Analysis

Value for the money:-

In 1884 when Michael Mark started a small business, he didn't have a good control on English terms so he had an indicator on his stall: "Don't ask the price- It's simply a penny". In 2009 2009 M&S chairman Sir Stuart Rose launched three days and nights return of cent bazaar. Of these three days and nights 20 decided on items were sold at 1p at 300 M&S branches (Sibbles & Carter, 2009). The point is can that slogan work in the current competitive market? It cannot work nowadays. M&S is one of the UK's major retailers. It sells various items in its stores. The cost of production of the goods is not same so they can not sell their goods on same price like Michael Markings was reselling in 1884. Even if indeed they diversify the income earn from the other good to the other goods, that will not help them to achieve period of time even sales. For instance profit on milk cannot set up losing on retailing of bakery. Now a day all competitors of M&S are trying to achieve lowest development cost. All are trying to put more affordability for his or her product by obtaining obtain the most with the less use of resources. Affordability does not signify reduce spending but it can be achieved in diverse ways with:

Reduce cost

Reduce inputs

Get more improvement in product quality

Increase outcome with less insight of raw material

Marks & Spencer is to put itself as a value for money brand, and admits it includes very costly. Prices should come down as it induces suppliers to source more products in foreign countries.

In today's rough competition M&S is trying to put more and more value of profit their products. To reduce cost of goods, they suggest their provider to import goods form the other countries. They have better their inventories and logistics.

Resources and central competences:

Physical resources: Each company has same resources as its competitors have however the way it manages use their resources identify from others. For instance M&S is having the same store sites in UK as Tesco, Sainsbury's and ASDA have. M&S is having following physical resources:

Value for money product: - By the use of appropriate resources M&S contains the good value because of its products. Today they have their own brands which are very popular in today's competitive market. These are continuous trying to develop their products that will assist them to endure in the retail industry. However the majority of their suppliers are UK structured so they remain facing product cost problems.

Own brands products: - M&S is utilizing their own brand name for every single and every product. They have got achieved good quality requirements. They will be the first retail chain which sells their own brands. They do not world famous brands in their stores like Coca-Cola, Nestle, and Cadbury etc. Despite of providing own brands they have got maintain their quality requirements. Nonetheless it is quite difficult for some dedicated customers of M&S to buy other popular brands in M&S stores. They need to go to other stores for purchase other than M&S brands. This is quite unrealistic in today's cut throat competition; it results many of M&S devoted customers switch over to its rivals such as Tesco and Sainsbury's.

Store sites and store exhibits: - As we realize Markings & Spencer has generated long time earlier, they have found that a lot of their stores are too small. They may have planned to broaden their store area by switching their stock rooms into floor area. That brings new logistic problem. They have found new solution as a satellite stores. They may have started to spread stocks and options to small braches from the primary branch. However they have long range of food products it's very difficult to control these perishable foods without stockrooms.

Core competences: Main competences indicate some factors which distinguish a product or a brandname from others. As we realize Grades & Spencer has long selection of products produced under its brand. The grade of product is better than the other brands. They always make an effort to provide more value of money to its customer.

Strategic eyesight and organisation culture:-

Increases the markets talk about in UK with own product and with own unbeatable quality requirements is the main vision of Grades & Spencer. It experienced a lot more autocratic organisation structure. However it has been improved with enough time change. Now the organisation structure has been transfer to flatter organisation structure. The employee may take quick decisions if it is required and it offers more accountability (The changing times).

SWOT of Marks & Spencer:-

Strengths:

M&S is which consists of own brand name with the huge product range. St Michel brand is very popular, used for cloths and food product. They have competitive prices advantages, it includes increase overseas important. They have widened its business not only in UK but all over the world. Using their own brand name they booked pre duty profit of 1bn in 1988 (Hawkesby, 2008). They have very favourable location on high street which attracts more and more customers. They have some particular group of faithful customers. M&S has strong employees and skilled staff. New changes by new chief executive Roger Holmes brings new opportunities in retail business. Tighter staffing level increase functional funds.

Weakness:-

In today's slash throat competition, M&S is struggling with the high cost of development. It's concentrating on particular class of contemporary society which narrows the opportunity of quantity of customers. Weak logistic reduce the availability of goods and products. Decrease the number of staff results poor customer service. Depends upon local distributor results high cost of development. Rough competition in food market such as Tesco, Sainsbury's and Asda type in fast and iced grocery store. In 2008 it's total sales were 6. 2% down and although inflation in grocery store products it's food sales were down by 4. 5% (Finch, 2008).

Opportunity:-

M&S can diversify their business like other sellers have done e. g. Tesco mobile, Tesco fund, Sainsbury finance etc. With diversification Grades & Spencer can expand their region of business and they can copy the income earn by different industries. M&S can increase the amount of products using its famous brand name St. Michel. M&S can go for the franchisee to increase their amount of customers and it'll help them to boost the talk about of in market.

Threats:-

M&S has began to sell other brands in their stores which might reduce the attractiveness of their own brands. If M&S will attempt to diversify their business it may creates lack of funds. M&S has finished down a lot of their stores scheduled to improve the funds which may cause the negative effect on their show prices. Because of shutting down some stores, it will lose market share.

PESTEL of Marks & Spencer :-

Political:-

Marks & Spencer has been run in more than 40 countries. It is highly affected by the political changes in these countries, e. g. if the government of UK changes immigration legislations than it might be affect M&S migrant personnel. Now a day the governments inspires retailers to provide combination job of flexible, lower paid and locally structured jobs to very skilled, higher paid and centrally located jobs (Balchin, 1994).

Economical:-

UK current economic climate is developed overall economy, per capita income is more than the other producing countries. It is favourable factor for M&S. however the price of production is also saturated in UK that is unfavourable factor. It reduces the margin of profit of the company.

Social:-

The population of UK is growing slow and the amount of working women is increasing it raise sales of M&S food products. UK is the fashion hub which means there's a great opportunity of top quality and stylist clothes.

Technological:-

Online shopping is taking place of store chopping which can reduce the investment cost in new stores. Self-checkout tills are available to lessen queue time.

Environmental:-

Now per day increasingly more retail stores are using recycled luggage and packing materials which cost is very less and they're getting cost reap the benefits of. The environmental laws are also very rigorous in UK.

Legal: - UK's labour legislations is very demanding somewhat than other countries. It strictly follows individuals right laws in which employees can be safeguarded from the workplace.

Question 2- M&S before 1990

Success of M&S strategy:-

Simon Markings put M&S on the new degree of growth. During his control many strategic changes has been made such as diversification. They have product rages not only in food products but also in clothing, groceries etc. He launched today's popular St. Michael brand. It differed the M&S from its challengers. The extension program have been taken placed which increase store area. However with this development several problems occurred like logistic problem. They were broadening their business at international level.

Porter 5 pushes:-

Threat of new entrants:-

The UK grocery store is dominated by very less opponents like Tesco, Asda, Sainsbury's and Marks & Spencer. Out of these companies Tesco is having monopoly in UK retail industry. The access obstacles in food industry are incredibly troublesome in UK because of health and safety law. However in clothing industry, there are so many rivals in UK like NEXT, River Island etc. M&S will be the only one who does food and branded clothing alongside one another.

Bargaining power of suppliers:-

It should be known that M&S is counting on hardly any UK centered suppliers which raises suppliers bargaining vitality which results high cost of products for M&S. therefore M&S is planning to source products from in another country at cheaper rate. Asda is having huge bargaining ability with its provider because it imports goods form overseas.

Bargaining electric power of customers:-

In UK food and clothing industry the customers are experiencing nice bargaining power. In UK customers is convinced in bulk shopping. If indeed they find some products very cheaper in one store they'll but other products from same store. M&S is having monopoly in its food quality and its own clothes are incredibly trendy and fashionable clothes which can be customers' favorite. Other super market segments are extending their business in bank, pharmacies etc. e. g. Tesco finance and Tesco mobile. That will increase customer's bargaining ability.

Threat of substitutes:-

Today competition is very difficult in both food and fabric market segments. M&S is featuring its own St. Michael brand for cloths, popular industry fashion cannot sustain it changes when time changes. M&S is having hazard from its opponents in cloth industry. M&S have to change their designs relating to current fashion demand.

Rivalry:-

Rivalry rises if the amount of firms boosts. In UK there are very few excellent market chains existing. They all compete for the marketplace share, the rapid food industry development increases rivalry. On the other side food is a perishable good which increases the rivalry. M&S, Tesco, Asda and Sainsbury's all are trying their best to sell food products. On the other side in fabric marker M&S have to face both very market competition and individual brands competition.

Question 3- M&S After 1990

Weak Strategy:-

Despite of portion good quality of product, M&S is burning off its market talk about in retail industry. They have taken its eye faraway from the customers, this means they believe that if your image and reputation is good which means you satisfied your customers. On the other side its competitors Tesco and Asda raise the relationship with the clients. M&S was much more relying in its suppliers to keep up good quality criteria which results high cost of goods sold. M&S is experiencing high cost of goods so it is very hard to preserve its market talk about and it also increases the competition. M&S was suffering from old-fashioned clothes. It was popular for trendy cloths but now enough time has been changed and customers' needs highly trendy clothes.

Two new proper approaches:-

Stuart Rose the new chief executive of Markings & Spencer has implied many changes after he became a member of M&S. The ex - CEO Holmes has put 400 other brand products in M&S to increase both offers and customers interest. However Stuart Rose is likely to cut the volume of outdoors product to 100 which is not really a wise decision (BBC, 2010). He is likely to refocus on M&S brands but it ought to be known that today there a wide variety of brands are being used by different customers. If he packages to imply this notion, M&S may be lost his more market talk about in retail industry. His changes for towel products are appreciable and it will improve the sales of cloths of M&S. He should also think about unrelated diversification e. g. he can start M&S mobile or in related diversification he can increase the number of food products.

Conclusion:-

As part of huge retail industry M&S must make some extensive changes in its strategy. It will have to market other brand. This will help it to get sustainability in this competitive market. It's very popular for its clothes and its own food quality requirements. These will help it to increase quantity of loyal customers. More and more products sourced from abroad can help it to be competitive in the purchase price.

Word Matter: 2251

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