Background
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. With the focused and clear strategy, every company is able to get growth and success in the operating market. Without a well-defined strategy, any company is not able to deal with the competition in the operating market. With the help of strategic operations, every business can be more focused, more productive and more profitable in the business (Analoui & Karami, 2009). This report identifies the existing strategies used by a company along with the strategic capabilities and resources in the business operations. For the discussion, the existing and famous clothing company Marks & Spencer is selected. Marks & Spencer is one of the foremost retail companies providing variety 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 (Marks & Spencer, 2016). In order to achieve the organizational goals and objectives, company has adopted some innovative strategies in its business objectives. This report focuses on the innovative and developed strategies adopted by Marks & Spencer to stay competitive in the market.
Value chain analysis
Main framework for the strategic analysis of Marks & Spencer is value chain analysis. The value chain analysis can be described as 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. The value chain analysis of Marks & Spencer is as follows:
Figure 1: Value chain analysis
(Source: Ferrell & Hartline, 2008)
Basically, inbound logistics are the activities which are related to the storing, receiving and allocating the raw material that go into the manufacturing of products and services. Marks & Spencer has won GSB supply chain award for the best supply chain practices in the business. Along with this, the company has also a significant lead due to sustainability program to implement the some changes in the supply chain at the global level. So, Marks & Spencer has a strong hold on the sustainability which is the major advantage of the company over its competitors (Joshi, 2009).
Marks & Spencer is operating in order to enhance the shopping experience of the customers and according to the 2016 annual report of the company, it would be working for increasing the visits of the customers in the stores by ‘inspiring and effortless experience’. Along with this, the company is also enhancing the customers experience by providing training and reward to the employees. There are hiccups for managing online operations of the company so that the online sales of Marks & Spencer can be improved effectively. Further, Marks & Spencer is also investing in the innovative IT systems so that supply chain management can be implemented effectively. There are various customers who want to do shopping by the online media platforms (TaylorWessing, 2015).
Task 1: Strategic direction
The outbound logistics focuses on the collection, storage and distribution of the products and services in order to provide the customers. Marks & Spencer is working with in-store shopping along with the shopping by online shopping, home catalogue and select and collect options. Further, Marks & Spencer is continuously investing in the warehousing which would work as the automated store National distribution centre to distribute clothing products among the customers. The company is also focusing on merging with the smaller warehouse to make the distribution and supply chain management more effective.
Marketing and sales activities are helpful in making the customers aware about the products and convince them to by that particular product or service. Marks & Spencer’s venture lab is working with the lean start up technology in order to enhance the shopping experience to the customers (Ferrell & Hartline, 2008). 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. It is observed that 60% of customers still prefer in-store experience. Further, the digital experience and customer engagement with the products is also increased by the social media platforms. Marks & Spencer is also engaged with high impact promotional tools by using customer loyalty data to increase value for the customers (Retail Week, 2016). Strategic initiatives taken by Marks and Spencer in last five years are described in the table.
Figure 2: Marks and Spencer five year plan
VRIN analysis
Based on VRIN analysis, Marks & Spencer is the powerful brand along with strong reputation for high-quality products and strong relationship with various suppliers. This set of core competencies include precious, exceptional and no other company is able to provide substitute of Marks & Spencer. This is the significant 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 (Drummond, Ensor & Ashford, 2012).
For achieving competitive advantage, Marks & Spencer has market development strategy which is helpful in enhancing the global presence. This strategy has huge potential for improving the sales of the company. Along with this, 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 (Braun & Latham, 2014). Company has various competitors in the market which are providing quality clothing products to the customers. Those competitors are Zara, H&M, Benetton and Gap. Marks & Spencer has competitive advantage over these competitors by effective strategies.
Further, 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. The company is dealing with proper rewards and recognitions of the local trends and patterns which are important for the business. By this strategy, company is able to achieve competitiveness in the market. So, company is focusing on the global strategy. The company is providing wide range of products to the customers. Marks & Spencer is the leading clothing retail store in the Malaysia clothing market. It is availing new opportunities and creating competitive advantage from the competencies and assets in the business (The Marketing Society, 2010).
Task 2: Strategic analysis
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 always is coming up with the new strategies such as to stay sustainable and competitive in the market. Along with this, competitive advantage is also achieved by strong offerings and high values to the customers. For Marks & Spencer, major key asset is its employees (Luffman, & Kenny, 2009).
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. The employees are using their skills to meet cultural, structural and personnel tools and techniques. Along with this, there are some techniques such as equal opportunities of employment to produce diverse work force and diversity in the business (Jones & Robinson, 2012). In order to retain the edge of competition, it is crucial to succeed in the work place. With the talented and diverse employees, Marks & Spencer is able to lead the goals successfully. Effective resources of the company improves sustainability and decision making process in the business. Marks & Spencer also develops effective knowledge management strategy to use the ideas for the innovative products and services. With the help of social media, Marks & Spencer provides cost effective marketing options and helpful in communicating with the customers (Jansson, 2011).
In order to analyze the strategic environment of Marks & Spencer, Porter five forces analysis will be done in this report. This will be helpful in fair analysis of the internal as well as external environmental in which the Marks & Spencer is operating.
Threat of entry-
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 (Marcer, 2012).
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 (Krish, 2012).
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.
Task 3: Further analysis
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 existing 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 (Ruddick, 2013).
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 (European Commission, 2011).
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 (Vizard, 2015)
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 customers as well as investors trust the company because of superior management quality in the business. The company has diversified products for the customers which are another added advantage and make the company competent in the competitive market (Bingham & Eisenhardt, 2011). 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. Along with this, rigid management system in the business makes Marks & Spencer to become successful in order to implement the changes in the market. So, the company has created more resources to seek new opportunities in the market. Further, Marks & Spencer has permitted autonomy for the store managers and they adopted various processes of buying the material along with seeking for overseas suppliers (Ruddick, 2016).
Apart from that, 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 (Jeannet & Hennessey, 2010).
Task 4: Possible strategies for defending core business
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. For the sustainable business in future, Marks & Spencer has to adopt some effective business strategies and those are as follows:
Ansoff matrix includes various strategies for the future business i.e. product development, market penetration, market growth and diversification. These are four ways in which company can attain beneficial market expansion.
Figure 3: Ansoff Matrix
(Source: Spencer, 2015)
Market penetration
This factor focuses on the growth of accessible product in the presented markets to enhance the market share. Marks & Spencer can penetrate the market by focusing on more hostile 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 (Mihm, 2010).
Product Development
In the product growth factor, new products can be introduced to existing markets. Marks & Spencer can provide the services for special events like parties, weddings, and conferences. These can be considered as the examples of product development (Spencer, 2015).
Market development
Market development includes selling existing products in the new market. 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 manufactured for new markets but this is viewed as the risky option. Marks & Spencer can use the diversification strategy in the rising economies of India, Russia and western countries which give chances for inventive products to be promoted (Payne & Holt, 2008).
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 (Glowik & Smyczek, 2011).
- 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 (Biggadike, 2010).
- 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 report 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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