Strategic analysis of Marks and Spencer

strategical analysis of tag and Spencer mark Spencer is iodin(a) the UKs leading retailers, having 600 spew ins in home country and a lot than 200 stores cross tonic the globe. Michael Marks started the penny bazaar st some(prenominal) at Leeds in 1884. by and by Michael Marks Simon Marks became a chairman of MS in 1926 to 1964. MS is well known for its quality and styles (Hawkesby, 2008).MS AnalysisValue for funds-In 1884 when Michael Mark started a business, he did non excite a well-grounded command on English language so he had a sign on his stall Dont ask the price- Its just a penny. In 2009 MS chairman Sir Stuart Rose launched three days present of penny bazaar. During these three days 20 selected items were s obsolete at 1p at 300 MS branches (Sibbles Carter, 2009). The main point is git that slogan mesh in todays competitive securities industry focalize? It lotnot work in todays grocery store. MS is single of the UKs largest retailers. It transmits var ious items in its stores. The monetary value of ingatheringion of these goods is not alike(p) so they cannot sell their goods on same price handle Michael Marks was merchandising in 1884. Even if they diversify the shekels pass water from the opposite good to the sore(prenominal) goods, which leave not help them to achieve break compensate gross revenue. For example profit on milk cannot set up the impairment on selling of bread. Now a day all rivals of MS ar assay to achieve lowest intersectionion cost. All are exhausting to put more value for money for their crossroad by obtaining maximum wellbeing with the less(prenominal) use of resources. Value for money does not mean shrivel up spending exactly it can be achieved in diverse ways with mortify costReduce inputsGet more improvement in harvest-time qualityIncrease output with less input of raw materialMarks Spencer is to position itself as a value for money brand, and admits it has too expensive. Prices testa ment come graduate as it encourages providers to source more products overseas.In todays tough competition MS is trying to put more and more value of money in their products. To reduce cost of goods, they suggest their supplier to import goods form the opposite countries. They deliver improved their inventories and logisticalals.Resources and core competencesPhysical resources Each shaping has same resources as its competitors abide but the way it manages use their resources polariate from others. For example MS is having the same store sites in UK as Tesco, Sainsburys and ASDA have. MS is having following somatogenic resourcesValue for money product By the use of appropriate resources MS has got the good value for its products. Today they have their own brands which are actually(prenominal) popular in todays competitive market. They are continuous trying to find their products that will help them to survive in the retail industry. However just about of their supplier s are UK based so they are still facing product cost problems.Own brands products MS is using their own brand line for each and e precise product. They have achieved good quality standards. They are the root retail chain which sells their own brands. They do not world noteworthy brands in their stores like Coca-Cola, Nestle, and Cadbury etc. Despite of selling own brands they have maintain their quality standards. However it is quite laborious for some unwavering customers of MS to buy other popular brands in MS stores. They have to go to other retailers for purchase other than MS brands. This is quite surreal in todays justify throat competition it results umpteen of MS allegiant customers switch over to its rivals such as Tesco and Sainsburys.Store sites and store displays As we know Marks Spencer has established pine time ago, they have bring forth up that many of their stores are too small. They have planned to expand their store area by converting their stock ro oms into floor area. That brings sassy logistic problem. They have found upstart solution as a air stores. They have started to distribute stocks to small braches from the main branch. However they have persistent range of regimen products it is actually difficult to manage these perishable nutrient items without stockrooms.Core competences Core competences mean some factors which differentiate a product or a brand from others. As we know Marks Spencer has long range of products produced under its brand name. The quality of product is better than the other brands. They always try to provide more value of money to its customer.Strategic vision and organisation culture-Increases the markets share in UK with own product and with own unbeatable quality standards is the main vision of Marks Spencer. It had oftentimes more autocratic organisation structure. However it has been changed with the time change. Now the organisation structure has been transfer to flatter organisation structure. The member of staff can take quick decisions when its required and it provides more accountability (The times).SWOT of Marks Spencer-StrengthsMS is using its own brand name with the wide product range. St Michel brand is very popular, used for cloths and nutrition product. It has competitive prices advantages, it has extend foreign important. It has expanded its business not solo in UK but all over the world. With their own brand name they booked pre tax profit of 1bn in 1988 (Hawkesby, 2008). It has very favourable location on high channel which attracts more and more customers. It has some particular group of loyal customers. MS has strong work force and skilled staff. New changes by sore chief executive Roger Holmes brings new opportunities in retail business. Tighter staffing level increase operational funds. timidness-In todays cut throat competition, MS is attempt with the high cost of production. Its focusing on particular class of company which narrows th e scope of twist of customers. Weak logistic reduce the availability of goods and products. Reduce the number of staff results poor customer service. Depends on local supplier results high cost of production. Tough competition in food market such as Tesco, Sainsburys and Asda enter in fast and frozen food market. In 2008 its over all sales were 6.2% down and even though inflation in grocery products its food sales were down by 4.5% (Finch, 2008).Opportunity-MS can diversify their business like other retailers have done e.g. Tesco mobile, Tesco finance, Sainsbury finance etc. With diversification Marks Spencer can expand their area of business and they can transfer the profit earn by different sectors. MS can increase the number of products with its historied brand name St. Michel. MS can go for the franchisee to increase their number of customers and it will help them to increase the share of in market.Threats-MS has started to sell other brands in their stores which may reduce t he popularity of their own brands. If MS will try to diversify their business it may creates shortage of funds. MS has unkindly down many of their stores due to raise the funds which may induct the negative effect on their share prices. Due to closing down some stores, it will lose market share.PESTEL of Marks Spencer -Political-Marks Spencer has been operated in more than 40 countries. It is highly influenced by the political changes in these countries, e.g. if the government of UK changes immigration law than it may be affect MS migrant staff. Now a day the governments inspires retailers to takeer mix byplay of flexible, lower gainful and locally based jobs to highly skilled, higher paid and centrally located jobs (Balchin, 1994).Economical-UK economy is developed economy, per capita income is more than the other developing countries. It is favourable factor for MS. however the cost of production is in addition high in UK that is unfavourable factor. It reduces the margin of profit of the company.Social-The state of UK is growing slow and the number of working women is increasing it boost sales of MS food products. UK is the hammer hub that means there is a bully opportunity of branded and stylist array.Technological-Online shopping is taking place of store chopping which can reduce the investment cost in new stores. Self-checkout tills are available to reduce queue time.Environmental-Now a day more and more retail stores are using recycled bags and boxing materials which cost is very less and they are getting cost benefit from. The environmental laws are also very strict in UK. legal UKs labour law is very strict rather than other countries. It stringently follows human right laws in which employees can be protected from the employer. school principal 2- MS before 1990Success of MS strategy-Simon Marks put MS on the new level of growth. During his leadership 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 introduced todays popular St. Michael brand name. It differed the MS from its competitors. The expansion program had been taken set(p) which expand store area. However with this expansion several problems occurred like logistic problem. They were expanding their business at international level.Porter 5 forces-Threat of new entrants-The UK food market is dominated by very less competitors like Tesco, Asda, Sainsburys and Marks Spencer. Out of these companies Tesco is having monopoly in UK retail industry. The entry barriers in food industry are very tough in UK because of health and guard duty law. However in clothing industry, there are so many competitors in UK like NEXT, River Island etc. MS are the only one who does food and branded clothing together. bargain reason of suppliers-It should be historied that MS is relying on very few UK based suppliers which increases suppliers negociate power which results high cost of products for MS. therefore MS is planning to source products from abroad at cheaper rate. Asda is having huge bargaining power with its supplier because it imports goods form overseas.Bargaining power of customers-In UK food and clothing industry the customers are having seemly bargaining power. In UK customers believes in bulk shopping. If they find some products very cheaper in one store they will but other products from same store. MS is having monopoly in its food quality and its clothes are very panacheable and trendy clothes which are customers favourite. Other super markets are expanding their business in banking, pharmacies etc. e.g. Tesco finance and Tesco mobile. That will increase customers bargaining power.Threat of substitutes-Today competition is very tough in both food and cloth markets. MS is having its own St. Michael brand for cloths, in fashion industry fashion cannot sustain it changes when time changes. MS is having threat from its competitors in clot h industry. MS have to change their designs according to current fashion demand.Rivalry-Rivalry increases if the number of firms increases. In UK there are very few super market chains existing. They all compete for the market share, the rapid food industry growth increases rivalry. On the other place food is a perishable good which increases the rivalry. MS, Tesco, Asda and Sainsburys all are trying their best to sell food products. On the other side in cloth marker MS have to face both super market competition and individual brands competition.Question 3- MS After 1990Weak Strategy-Despite of serving good quality of product, MS is losing its market share in retail industry. They have taken its eye off from the customers, it means they believe that if your image and reputation is good that means you squelched your customers. On the other side its rivals Tesco and Asda increase the relationship with the customers. MS was much more relying in its suppliers to maintain good quality standards which results high cost of goods sold. MS is suffering from high cost of goods so it is very difficult to sustain its market share and it also increases the competition. MS was suffering from old fashioned clothes. It was popular for trendy cloths but now the time has been changed and customers require highly fashionable clothes.Two new strategic approaches-Stuart Rose the new chief executive of Marks Spencer has implied many changes after he coupled MS. The former CEO Holmes has put 400 other brand products in MS to increase both sells and customers interest. However Stuart Rose is planning to cut the number of outside product to 100 which is not a wise decision (BBC, 2010). He is planning to refocus on MS brands but it should be noted that today there so many different brands are used by different customers. If he plans to imply this idea, MS may be lost his more market share in retail industry. His changes for cloth products are appreciable and it will raise the sales of cloths of MS. He should also think about un colligate diversification e.g. he can start MS mobile or in related diversification he can increase the number of food products. demonstration-As part of huge retail industry MS has to make some thorough changes in its strategy. It should have to sell other brand. This will help it to gain sustainability in this competitive market. It is very popular for its clothes and its food quality standards. These will help it to increase number of loyal customers. More and more products sourced from overseas will help it to compete in the price.Word Count 2251