Company profile
- Strategy can be considered as the tactical course of action which is developed to achieve long term objectives. It is science as well as art of planning and organizing resources for the most effective and efficient use in the changing market environment.
- Strategy in an organization includes of what management is deciding about future business operations along with the scope of the business. it also involves managerial choice among various alternative action programs in the business, various business approaches and competitive moves to gain organizational goals and objectives.
- The formulated strategies have long terms implications on the business operations. it is also framed by the top management of the company. In other words, the strategy or strategic actions may be called as the ‘game plan of management’
- With the focused and clear strategy, every company is able to get growth and success in the operating market. With the help of strategic operations, every business can be more focused, more productive and more profitable in the business. In order to operate the business in the international market, it is crucial for the companies to adopt the effective strategy in the business activities.
- In order to operate the business in the international market, it is crucial for the companies to adopt the effective strategy in the business activities. This study identifies the existing strategies used by a company along with the strategic capabilities and resources in the business operations.
- With the help of strategic operations, every business can be more focused, more productive and more profitable in the business.
- For the discussion, the existing and famous clothing company Marks & Spencer is selected. Marks & Spencer is one of the leading retail companies providing wide range of clothing products to the customers in all over the world.
- The company is a global supplier of innovative clothing and fashion products. There are around 78000 people working with this company.
- The company is focused on providing excellent shopping experience to the customers along with wide range of hospitality options.
- In order to achieve the organizational goals and objectives, company has adopted some innovative strategies in its business objectives.
- This study focuses on the innovative and developed strategies adopted by Marks & Spencer to stay competitive in the market.
- The company mainly deals with the clothes, luxury products, food items etc. Because of its unique strategy and competitive advantage, the company became more profitable company.
- Value Chain analysis
- This is the way to analyze the business activities of a company in order to create competitive advantage in the business. Key framework for the strategic analysis of Marks & Spencer is value chain analysis.
- The value chain analysis refers to the type of chain focusing upon the inbound as well as outbound activities using by the company in the business operations. It should be noted that Marks & Spencer focuses on the delivery of products in the best possible manner.
- It means the company uses one of the significant way by which profitability can be increased for achieving competitive advantage in the market. Value chain represents internal activities used by a company while converting inputs into outputs.
- Objective of value chain analysis is to analyze the competitive advantage of Marks and Spencer into discrete activities or operations and examine hoe every activity contributes to enhance the cost position of the company or the comparative willingness of the customers to pay.
- Inbound Logistics-The Company has a significant lead due to sustainability program Company has strong hold on the sustainability which is the major advantage of the company over its competitors.
- Operations-the Company is also enhancing the customers experience by providing training and reward to the employees. Marks & Spencer is also investing in the innovative IT systems so that supply chain management can be implemented effectively.
- Outbound logistics-Marks & Spencer is working with in-store shopping along with the shopping by home catalogue, online shopping and click and collect options. company is also focusing on merging with the smaller warehouse to make supply chain more effective.
- Marketing and sales- Marks & Spencer’s venture lab is working with the lean start up technology in order to enhance the shopping experience to the customers. Along with this, multi-channel experience is also provided to the customers for shopping by using online platforms, mobile, catalogue or by visiting in-store.
In last five years, Marks and Spencer have an existing business by penetrating the market and develop some markets. Company has used diversification strategy including defensive and offensive. The reason of using defensive strategy is the spread the risk of market contraction when existing product or market is not providing further opportunities. The strategy is also offensive which include new areas of the market. The above given figure describes the strategic initiatives taken by Marks and Spencer in last five years. In year 1, company was focused on increasing market share and clothing line revenue by market expansion of new products. In the year 2nd and 3rd, company was focused on product development and market development with the new products. In 4th year, company adopted contingency plan to enter in the new market by focusing on non-users. In 5th year, company was focused on the market developments by winning competitors’ customers.
VRIN analysis is important for analyzing the resources and capabilities of the company while operating the business in the competitive market. There are basically four important features in order to analyze the resources of the company. Those factors are valuable, rare, inimitable and non-substitutable.
- Valuable- When resources are able to provide the value to the company and they can be the sources of competitive advantage in the market.
- Rare- In the company, resources have to provide unique strategy in order to achieve competitive advantage in the market as compared to the other companies. So, the resources must be unique.
- Inimitable- Resources can be the sources of sustained competitive advantage if competitors are not able to achieve them. If the resources are valued and rare but competitors are able to achieve the resources then they cannot be source of competitive advantage.
- Non-substitutable- Resources must be able to replace by any other valuable resources in the business operations. If two resources can be used separately to execute same strategy then they are strategically equivalent. Such resources cannot be used as the source of sustained competitive advantage.
- VRIN analysis-
- Marks & Spencer is the powerful brand along with long standing reputation for high-quality products and strong relationship with various suppliers. This set of core competencies include valuable, rare and no other company is able to provide substitute of Marks & Spencer. This is the important and major competitive advantage of Marks & Spencer in the market.
- In the current time of intense competition, increased availability of other established brands and well as growing use of online platforms and internet are challenge for Marks & Spencer’s resources and competences. For the company, it is not easy to develop new resources and competencies that cannot be easily replaced by other companies to achieve competitive advantage in the market.
- Competitive Advantage-
- For achieving competitive advantage, Marks & Spencer has market development strategy which is helpful in enhancing the global presence. This strategy has potential to meet the financial results also. With the help of competitive advantage, Marks & Spencer is able to implement product development strategy which is important to develop new products with the respect to cultural aesthetics and its presence in the market.
- Because of its low cost structure, Marks & Spencer is able to make its strong presence in the global markets. To achieve long-term success and growth, Marks & Spencer focuses on the continuous product development strategy.
- Next, company is seeking to hire talented people in terms of employees. Marks & Spencer is experiencing competitive advantage in terms of cost, differentiation and strong workforce, effective knowledge management which are great asset to the company. Marks & Spencer is seeking competitive advantage with the cost and leadership strategies.
- Marks & Spencer is using the source of competitive edge as the employees in the business. There are talented and competent employees who are using their talents and knowledge to entertain the customers. The HR department in the company seeks to achieve competitive edges by the strategic develop of strongly committed people.
Porter’s five forces is effective framework that uses five industry forces to analyze the intensity of competition and profitability level in the industry. The five forces analyze the industry structure and level of competition in that particular industry. If there are strong competitive forces in the industry then the industry is less profitable for the companies. The five industry forces include threats of new entrants, bargaining power of suppliers, bargaining power of buyers, threats of substitutes and competitive rivalry. It is important for every company to evaluate the competitive position of business in the industry and to identify the strengths and weakness so that market position can be strengthened. Porter’s five forces framework is very useful in formulating the strategy of Marks and Spencer as it shows how powerful every five key forces in the clothing industry.
- Threats of New entrants- Threat of entry at Marks & Spencer can be analyzed based on the loyalty of the customers which discourages a new company to enter in the retail clothing industry. Marks & Spencer is operating in the industry since long time and the company itself is the main barrier to entry for the new companies. It is also observed Marks & Spencer is an expert in the clothing retail industry so; it is very difficult for other retail chains to enter and share the market with the company.
- Bargaining power of buyers- In case of Marks & Spencer, the bargaining power of buyer is strong as they have various choices for the brands in the market. There are well established brand like Zara and H&M which are providing quality clothing products to the customers. So, customers have choice to switch on other brands when they do not get the products based on their needs and requirements.
- Bargaining power of suppliers- In case of bargaining power of buyers, Marks & Spencer gives preferences to British suppliers in the operating market. Marks & Spencer is becoming quite dependent upon its suppliers. So, the bargaining powers of the suppliers in the retail industry are quite high.
- Competitive Rivalry-Marks & Spencer is facing high level of competition from other companies operating in the market. The key reason of rivalry amongst the competitors are introduction of quality products, attractive rates and fashionable clothes based upon the up-to-date fashion etc. along with this, it is also observed that Marks & Spencer was unable to fight with current level of competition operating in the retail market.
- Threats of substitutes-It has been seen the substitute products in the industry are reducing the demand level products of Marks & Spencer in the market. The main threats of substitute for Marks & Spencer are Tesco, Sainsbury, Zara and H&M. These companies are providing innovative products to the customers in the market.
Further strategic analysis of Marks and Spenser is as follows:
- Vision-
The vision statement of the company includes major external context and assumptions that impact on the organizational goals in the business. The vision statement of Marks & Spencer is to be leading clothing retail company and provide better quality clothing products to the customers. Basically, Marks & Spencer wants to satisfy and facilitate the customers with the use of latest technology.
- Mission-
Strategic Direction
The mission of an organization is basically an opportunity to convey in the compelling and concise way to aim to target the market. The mission statement of Marks & Spencer is to provide the quality products accessible for all the customers. Marks & Spencer has introduced a new sharper mission statement for the strategic objectives. The mission statement of the company reflects two dimensions which define the objective of the company along with the intended contributions in order to enhance the quality of the products and services which are served to the customers. Those two dimensions are:
- Providing quality products i.e. ensuring high quality products and services to the potential customers,
- Accessible to all i.e. providing high quality products within the range of all people including attractive prices
- Strategic capabilities-
- For Marks & Spencer, excellent and quality products are the key areas of competency. Along with this, the superior technology also improves the capability of the company in the business operations. For the company Marks & Spencer, core competencies are very important as they allow the company to provide consistent quality and high value.
- The company has diversified products for the customers which are another added advantage and make the company competent in the competitive market. Brand image and loyalty of the customers are the crucial resources for the company to run the business. Due to the core competencies, Marks & Spencer is able to develop a strong brand, good customer services and excellent quality control in the business.
- Rigid management system in the business makes Marks & Spencer to become vulnerable to implement the changes in the market. So, the company has created more resources to seek new opportunities in the market.
- The internal organizational structure of the company is flat in nature. This motivates the employees to participate in the decision making process of the business. By this organizational structure, the relationship between the employees, management, suppliers and customers are getting stronger day by day which has positioned Marks & Spencer at the core of market. With the combination of resources and capabilities, Marks & Spencer is able to achieve unique competency in the market.
In order to analyze the possible strategies for Marks and Spencer, Ansoff matrix is the best and effective framework. Ansoff Matrix includes the matrix of present and potential products of the company in the market. This matrix provides the ways to the company to grow in the market in the existing products and new products and in the existing market or new market. There are basically four possible product-market combinations in the Ansoff matrix i.e. market penetration, product development, market development and diversification. By analyzing the strategic initiatives of Marks & Spencer, it is analyzed that the company has ability to sustain competitive advantage and economic performance in the market.
- Ansoff Matrix-
- Ansoff matrix includes various strategies for the future business i.e. product development, market penetration, market development and diversification. These are four ways in which company can achieve profitable market growth.
- Market penetration- Marks & Spencer can penetrate the market by focusing on more aggressive promotional campaigns including sales promotions and competitive pricing strategies. Along with this, company can introduce free overnight shipping on some specified items on its website. By this way, e-commerce market can be penetrated.
- Product Development- Marks & Spencer can provide the services for special events like parties, weddings, and conferences. These can be considered as the examples of product development.
- Market development- Marks & Spencer should be able to sell its products in the growing demographic area. Although it is challenging to expand the business in the new markets but company is able to achieve the objectives by innovative marketing strategies.
- Diversification- By the diversification strategy, new products are developed for new markets but this is viewed as the risky option. Marks & Spencer can use the diversification strategy in the emerging economies of India, Russia and western countries which provide opportunities for innovative products to be marketed.
There are some recommendations for Marks & Spencer to enhance the competitive position in the market. From the above analysis, it is observed that the company is doing well in the fashion retail market. There are some possible strategies for the company by which it can defend its core business. So, there are various recommendations for Marks & Spencer in order to enhance its market share in the operating market and those are as follows:
- Company should focus on rebranding and gradation of the corporate image to stay competitive in the market.
- Company should focus on restructuring the supply chain practices within various stores according to the demographic patterns. Company should adopt straightforward approach for this manner.
- Company should think about redesigning of the stores which would be helpful in increasing the space of the store, providing high level of comfort to the customers and convenience to the customers in terms of lift, shop and browse the products from the stores.
- Company should also focus in the packaging of the stocks in the stores. The packaging material of used by the Marks & Spencer should be attractive so that more and more customers can be targeted for the products of the company.
- Marks & Spencer can use its strength in terms of developing strong brand value. The company must use this strength in its functioning. Marks & Spencer should capitalize more in the online shopping facility.
Conclusion
This study focuses on the marketing strategies of famous clothing retail company Marks & Spencer. From the above analysis, it is analyzed that company can take advantage of market environment and become competitive in the market. There are various factors in the market like change in the consumer tastes which impact on the business operations of Marks & Spencer. By the use of internet as an online shopping, company has scope of e-commerce. As a long-standing business in Malaysian market, the differentiation strategy of Marks & Spencer focuses on the quality and value of the products. The company must refocus on its efforts to become an innovative and customer oriented business with specific focus on introducing new products and services. The market of fashionable clothing is very demanding. Marks & Spencer has to focus on meeting the demands of the customers by joint venture in the strategic partners in order to achieve competitive advantage. So, the company should increase its investments in the advertisements to build brand image in the fashion market to support innovation and value.
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