BY:
AGUSTIN, GERALDINE G. ARDE, CARLEIL S.D.
TERMINOLOGIES •
FLAGSHIP STORE- CHAIN’S LARGEST STORE THAT HOLDS OR SELLS THE HIGHEST
VOLUME OF MERCHANDISE OR A CHAIN’S FIRST RETAIL OUTLET. •
FLAGSHIP- THE BEST OR LARGEST MOST IMPORTANT ONE OF A GROUP OF THINGS
SUCH AS PRODUCTS, STORES, ETC. •
TURNOVER - THE AMOUNT OF MONEY THAT IS RECEIVED IN SALES BY A STORE OR
COMPANY.
•
INTERVENE- OCCUR IN TIME BETWEEN EVENTS
•
PROFIT MARGINS- EXPRESSED AS A PERCENTAGE AND, IN EFFECT MEASURE HOW
MUCH OUT OF EVERY DOLLAR OF SALES A COMPANY ACTUALLY EARNINGS. •
SUBSTANTIAL- LARGE IN AMOUNT SIZE, OR NUMBER
KEEPS IN
MARKS & SPENCER M&S! IS A BRITISH RETAILING INSTITUTION. FOUNDED IN "##$ BY MICHAEL MARKS, A POLISH %EW WHO HAD EMIGRATED TO ENGLAND, THE COMPANY COMPANY HAS BEEN A NATIONAL NATIONAL CHAIN SINCE SI NCE THE EARLY E ARLY "''S. BY "() THE COMPANY COMPANY HAD A BRANCH IN EVERY MA%OR TOWN IN THE COUNTRY AND HAD BECOME BRITAIN’S LARGEST RETAILER, A POSITION IT STILL HELD IN "). PRIMARILY A SUPPLIER OF CLOTHING AND FOODSTUFFS, M&S IS ONE OF THE WORLD’S MOST PROFITABLE RETAILERS. IN "( M&S’S (#' UNITED KINGDOM STORES HAD SALES OF *+. BILLION. M&S ACCOUNTED FOR ".' PERCENT OF ALL RETAIL CLOTHING SALES IN THE UNITED KINGDOM, AND $.) PERCENT OF ALL FOOD SALES. ACCORDING TO THE GUINNESS BOOK OF RECORDS, IN "" THE COMPANY’S FLAGSHIP STORE AT MARBLE ARCH IN LONDON HAD A TURNOVER OF *,+'' PER SUARE FOOT, MORE THAN AY OTHER DEPARTMENT DEPARTMENT STORE IN THE WORLD.
M&S PROVIDES A SELECTIVE RANGE OF CLOTHING AND FOOD ITEMS AIMED AT RAPID TURNOVER. THE FIRM SELLS ALL ITS PRODUCTS UNDER ITS OWN ST. MICHAEL’S MICHAEL’S LABEL. LABE L. M&S OFFERS HIGH-UALITY HI GH-UALITY PRODUCTS PRODUCT S AT AT MODERATE RATHER THAN LOW PRICES. THIS COMBINATION OF HIGH UALITY AND REASONABLE PRICE ENCOURAGES CUSTOMERS TO ASSOCIATE ASSOCIATE M&S WITH VALUE FOR MONEY, AND THE FIRM’S ABILITY TO DELIVER THIS COMBINATION CONSISTENTLY OVER THE YEARS HAS BUILT UP ENORMOUS GOODWILL FROM CUSTOMERS IN BRITAIN. IN FACT, SO STRONG IS M&S’S M&S’ S REPUTA REP UTATION TION AMONG AMONG BRITISH B RITISH CONSUMERS THAT THAT THE COMPANY DOES NO ADVERTISING IN THAT MARKET.
TO ACHIEVE THE COMBINATION OF MODERATE PRICES AND HIGH UALITY, M&S WORKS VERY CLOSELY WITH ITS I TS SUPPLIERS, SUPP LIERS, MANY WHOM HAVE BEEN SELLING MA%OR PORTION OF THEIR OUTPUT TO M&S’S PRACTICE OF HAVING ITS TECHNICAL PEOPLE WORK CLOSELY WITH SUPPLIERS ON PRODUCT DESIGN. SUPPLIERS ARE MORE THAN WILLING TO RESPOND TO THE FIRM’S DEMANDS, FOR THEY KNOW THAT M&S IS LOYAL TO ITS SUPPLIERS AND AS IT GROWS SO DO THEY. THE SALES VOLUME GENERATED BY M&S’S STRATEGY OF PROVIDING ONLY A SELECTIVE RANGE OF CLOTHING AND FOOD ENABLES M&S’S SUPPLIERS TO REALIZE SUBSTANTIAL ECONOMIES OF SCALE FROM LARGE PRODUCTION RUNS. THESE COST SAVINGS ARE THEN PASSED ON TO M&S IN THE FORM OF LOWER PRICES. IN TURN, M&S PASSES ON PART OF THE SAVINGS TO THE CONSUMER.
CRUCIAL TO M&S’S EFFECTIVENESS IS A CLEAR FOCUS THE CUSTOMER. THE TONE IS SET BY TOP MANAGEMENT. EACH SENIOR MANAGER MAKES A HABIT OF WEARING M&S CLOTHES AND EATING M&S FOOD. THUS MANAGERS DEVELOP AN UNDE UNDERSTA RSTANDING NDING OF WHAT IT IS THAT CUSTOMERS WANT AND LIKE ABOUT M&S PRODUCTS/ BY STAYING STAYING CLOSE TO THE CUSTOMER, THEY CAN IMPROVE THE UALITY AND DESIGN OF THE PRODUCTS THEY OFFER. THE FOCUS ON THE CUSTOMER IS REINFORCED AT THE STORE LEVEL BY STORE MANAGERS WHO MONITOR SALES VOLUME AND UICKLY UICKLY IDENTIFY LINES LIN ES THAT ARE SELLING SEL LING AND THOSE THAT ARE NOT. THEN STORE STORE MANAGERS CAN TRANSMIT THIS INFORMA INFORMATI TION ON TO SUPPLIERS, WHICH HAVE THE CAPACITY TO MODIFY THEIR PRODUCTION UICKLY, UICKLY, INCREASING THE OUTPUT OF LINES THAT THAT ARE NOT MOVING. MO VING. •
ON
ANOTHER CENTRAL FEATURE FEATURE OF M&S IS I S ITS PIONEERING PIO NEERING APPROACH TO HUMAN RELATIONS. RELATIONS. LONG BEFORE IT BECAME FASHIONABLE TO DO SO, M&S HAD DEVELOPED A COMMITMENT COMMITMENT TO THE WELL-BEING OF ITS I TS EMPLOYEES. M&S HAS ALWAYS VIEWED ITSELF AS A FAMILY BUSINESS WITH A BROAD RESPONSIBILITY FOR THE WELFARE OF ITS EMPLOYEES. M&S HAS ALWAYS VIEWED ITSELF AS A FAMILY FAMILY BUSINESS WITH A BROAD RESPONSIBILITY FOR THE WELFARE WELFARE OF ITS EMPLOYEES, M&S OFFERS EMPLOYEES MEDICAL AND PENSION PLANS WITH BENEFITS THAT ARE WELL ABOVE THE AVERAGE WITHIN THE INDUSTRY. LIKEWISE, THE COMPANY PAYS PAYS ITS EMPLOYEES EMPLOY EES AT A RATE RATE THAT TH AT IS WELL ABOVE THE AVERAGE AVERAGE WITHIN THE INDUSTRY, INDUSTRY, AND IT MAKES A PRACTICE OF PROMOTING EMPLOYEES FROM WITHIN, RATHER RATHER THAN HIRING OUTSIDE. OU TSIDE. FURTHERMORE, THERE ARE A SERIES OF IN-STORE AMENITIES FOR EMPLOYEES, INCLUDING SUBSIDIZED CAFETERIAS, MEDICAL SERVICES, SERVICES, RECREATION RECREATION ROOMS, AND HAIRDRESSING SALONS. THE REWARD REWARD FOR M&S IN THE TRUST AND LOYALT LOYALTY Y OF ITS IT S EMPLOYEES EMPLOYEE S AND, ULTIMATEL ULTIMATELY Y, HIGH EMPLOY E MPLOYEE EE PRODUCTI P RODUCTIVITY. VITY.
ALSO VITAL IS THE COMPANY’S COMMITMENT TO SIMPLIFYING ITS OPERATING STRUCTURE AND STRATEGIC CONTROL SYSTEMS. M&S HAS VERY FLAT HIERARCHY / THERE IS LITTLE IN THE WAY OF INTERVENING MANAGEMENT LAYERS BETWEEN STORE MANAGERS AND TOP MANAGEMENT. THE FIRM UTILIZES %UST TWO PROFIT MARGINS, ONE FOR FOODSTUFF AND ONE FOR CLOTHING. THIS PRACTICE REDUCES BUREAUCRACY AND FREES ITS STORE MANAGERS FROM WORRYING ABOUT PRICING ISSUES. INSTEAD, THEY ARE ENCOURAGED TO FOCUS ON MAXIMIZING SALES VOLUME. CONTROL IS ACHIEVED PARTLY THROUGH FORMAL BUDGETARY PROCEDURES AND PARTL PARTLY Y THROUGH THROUGH AN INFORMAL INFORMA L PROBING PROCESS, IN WHICH TOP MANAGEMENT DROPS IN UNANNOUNCED AT STORES AND UIZZES MANAGERS THERE ABOUT THE STORE. IN I N A TYPICAL YEAR, %UST ABOUT EVERY STORE IN BRITAIN BRITAIN WILL RECEIVE AT LEAST ONE UNANNOUNCED VISIT FROM TOP MANAGEMENT. THIS KEEPS STORE MANAGERS ON THEIR TOES AND CONSTANTLY CONSTANTLY ALERT TO THE NEED TO PROVIDE KIND OF VALUE-FOR-MONE VALUE-FOR-MONEY Y PRODUCTS THAT THAT CUSTOMERS HAV HAVE E TO ASSOCIATE ASSOCIATE WITH WIT H M&S.
I.
TITLE: MARKS & SPENCER
II.
VIEWPOINT: MICHAEL MARKS, FOUNDER OF MARK & SPENCER
III. TIME CONTEXT: EARLY 1900 1900’S ’S
IV..SWOT ANALYSIS IV STRENGTHS • • •
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B012314’5 6307852 08231680 M&S 15 948 9 2;8 <906=’5 >952 ?09123@68 08231680 I4 "(, M&S’5 (#' U4128= K147=9> 529085 ;3= 53685 9 *+. @166194. A90=147 29 G144855 B99 9 R890=5, 14 "" 2;8 9>?34’5 6375;1? 52908 32 M30@68 A0; 14 L94=94 ;3= 3 204980 9 *+'' P091=8 3 5868218 03478 9 692;147 34= 99= 128>5 31>8= 32 03?1= 204980. O805 ;17;-3612 ?09=25 32 >9=80328 032;80 2;34 69< ?0185. W905 80 69586 <12; 125 5??61805 29 3;188 2;8 9>@1432194 9 >9=80328 ?0185 34= ;17; 3612. S3685 96>8 78480328= @ M&S 5203287 843@685 2;810 5??61805 29 083618 5@52342136 8949>15 9 5368 09> 63078 ?09=2194 045.
WEAKNESS • •
N9 3=80215147 T;8 9>?34 ;3= 3 @034; 14 880 >390 29<4 14 B012314
STRENGTHS •
• •
• •
C6830 95 94 2;8 529>805 @ >3147 83; 584190 >343780 <8305 M&S 692;85 34= 832 M&S 99=, 2;5 2;8 =8869? 4=805234=147 9 <;32 2;8 529>805 618 3@92 M&S ?09=25. P194880147 3??093; 29 ;>34 086321945 S1>?6118= 9?8032147 520208 34= 52032871 942096 5528>5. S??6180 9 692;147 34= 99=525 A9428= 90 ".' ?80842 9 366 082316 692;147 53685 14 U4128= K147=9>, 34= $.) ?80842 9 366 99= 53685.
COMPETI COMP ETITIV TIVE E ADVANTA ADVANTAGE GE EFFICIENCY
⁻ MAINTAIN A GOOD RELATION OR COORDINATE WITH ITS SUPPLIERS ⁻ SENIOR MANAGERS MAKES IT A HABIT TO WEAR M&S CLOTHES AND EAT M&S FOO, THUS MANAGERS
DEVELOP AN UNDERSTANDING OF WHAT IT IS THAT THE CUSTOMERS CUS TOMERS WANT WANT AD LIKE ABOUT M&S PRODUCTS.
⁻ INCREASING THE OUTPUT OF LINES THAT ARE SELLING WELL AND REDUCING THE LINE OF OUTPUT OF LINES THAT ARE NOT MOVING.
⁻ STRATEGY OF PROVIDING ONLY A SELECTIVE RANGE OF CLOTHING AND FOOD ENABLES M&S SUPPLIERS TO REALIZE SUBSTANTIAL ECONOMICS OF SCALE FROM LARGE PRODUCTION RUNS.
⁻ UNEXPECTED VISITS FROM TOP MANAGEMENT UALITY
- MODERATE PRICES AT HIGH UALITY CUSTOMER RESPONSIVENESS
COMBINATION OF HIGH UALITY AND REASONABLE PRICE ENCOURAGES CUSTOMERS TO ASSOCIATE M&S
