Issues of marks spencer

Issues of marks spencerIntroductionIn this assignment, an analysis and discussion of the strategies and issues of Marks Spencer will be carried out.MS was developed by immigrants. It was in 1884 that Michael Marks, a Russian-born Polish refugee, opened his show while stall at a market in Leeds. Around ten years later he moved the trestle-table conglomerate to Manchester where he went into partnership with Tom Spencer, a former cashier. Over the next ten years they built an operation that would grow to fetch the or so British of institutions.MS is a major British retailer with every deposit 885 stores in the United Kingdom and with over 600 domestic and 285 international stores too. It is the largest clothing retailer in the United Kingdom, as well as being an up market food retailer, and as of 2008, it was rated the 43rd largest retailer in the world. Most of its domestic stores deceive both clothing and food, and since the turn of the century it started expanding into separ ate ranges too, such as home-w ar, furniture and technology. MS has in place objectives to bring sh atomic number 18holder value in calls of attach returns, merely besides in terms of affix gross revenue and market share in retailing. Its beliefs and standards are outlined as Our customers advance to see Marks Spencer as the place to shop for special food, produced to exacting standards. It also sees its workforce as an important part of its plan and also considers modernising its stores as a key corporate objective. Its vision is to set high customer standards and its mission in making inspirational quality getatable to all.Nevertheless, the time when MS was extremely successful has long gone, as their clothing sales have come under pressure from other big companies such as next and Asda WalMart, in 2001 the ships company recorded a mere 145 million profit (US$ 275M), adding to this its food revenue has been hit by Tesco. Further more(prenominal)(prenominal), in the la st 5 years the company has experienced a succession of sorts in management and corporate structures, following a massive decline in sales. What used to be a leading worldwide quality food and clothing retailer has now become uncompetitive in the market industry internationally, especially in the United Kingdom. A major contributing accompanimentor to this has been due to the pressure from the economic crisis world wide.In 2002 the Chairman and Chief Executive of MS, gave key information regarding the managements recovery plan for the company, and the speech and extracts from Marks Spencer Press Releases provided a valuable insight into the strategic plans for Marks Spencer. The Chief Executive of Marks Spencer insists that firstly the spunk of the company should be dealt with, and focus needs to be given to the entire United Kingdom commerce, with a mission to make inspirational quality accessible to all.The briny objective of the outline for Marks and Spencer is the expansi on into the worldwide market, and then aim to continue keeping ahead of the formulate market so that it batch always inspire customers and raise the quality and standards or their product range. However, for the company to continue its previous success, they kept adapting tender strategies when former strategies started to fail. Marks and Spencers plans to focus on keeping strong connective with their current customer, whom have been loyal for many years and are the reason for the rapid growth and success of the company. A nonher main focus for marks and Spencer is to work nearly with the market to build a strong bond and trust with their shareholders, and also to provide best possible dividend whilst maintaining the company standards and profits. In addition, strongly considering their stakeholders opinions which are important as many companies success depends on its market and production, so even keeping a strong connection with employees on company improvements, and keeping peace between pressure groups and the company is useful in improving the daub image.The main issues that Marks and Spencer has faced over the past five years are their sales, since they have dropped massively compared to previous success. Marks and Spencer have currently published what their occupation plans are, and what they hope to aim at bottom the upcoming years. Through this research it is aimed to investigate whether Marks and Spencer has successfully abided to the system but still fai conduct, does this mean that the strategy was poorly planned, or whether in fact the strategy has increased their growth within the UK and worldwide market.Marks and Spencer as an international companyFrom an international market perspective, Marks and Spencers aims and standards of their presentation and for the wider Marks and Spencers scrapes in selected export markets were a successful business globally. However, it seems that Marks and Spencers franchise stores are regarded much small er than the UK stores. Nevertheless, part of its strategic review, Marks and Spencer announced the closure of its loss-making businesses in Europe due to this. In 2005, Marks and Spencers internationally began to operate in 29 countries including Hong Kong. and had 198 franchised outlets together with 19 directly knowledgeed stores in Hong Kong, along with 65 stores were located in the Asia-Pacific region, 60 in Europe, 45 in Central Europe with the rest in central Asia and the Middle East. MS used to own and operate 38 stores across France, Germany and Spain, but they were closed down in 2001 by the previous chairman, Luc Vandevelde, as it ran into problems due to the economic crises in the UK. In April 2007 the company set out many plans to open 150 new international stores over the following three years, the majority via franchising. The first of the openings were scheduled to take place during the summer in Ukraine and Bulgaria, alongside further company-owned expansion in Irel and. Franchisee-owned developments are also underway in India and Russia too. Marks and Spencer set out how the stores should look and cheat on its branded goods and also view each store widely.Furthermore, its competitors such as Next and Debenhams across India have had also finance problems, however, there strategic plans did not fail as much as Marks and Spencers did globally, this is due to their continuous new products and brands compared to that of Marks and Spencer. They also focused on alloting more than just clothes and food but also to sell furniture etc. Much has been said that Marks and Spencer needs to commit and be determined of what they sell best, which is food and clothing, which in turn this will help the company as a whole to maintain there previous success.Despite its recent pecuniary problems and its slightly confused brand image, MS shows what can be done with tradition in the development of brand equity. Standing for values that have a place in society bey ond the product can have important cultural ties for consumers. MS stands for Britain as much as it does for retailing, and thats a symbolization that British consumers arent keen to give up in a hurry.During 2007/08 Marks and Spencer announced there plan to grow their International business to between 15 to 20% of total group revenues by 2012. There strategy remains unchanged, although they are adapting their plans as the economy dictates. Marks and Spencers aim is to reach their own target, with sales up 25.9%.Marks and Spencers five key elements for an International growth strategy are the followingThe Growing of their equity partnerships in line with their revised business model.The Expanding of footprint into new markets and within markets where we already operate.To Achieving operational excellences.To highlight the brand integrity and awarenessFinding innovative ways to grow our food advance.FranceMSs most concentrated European effort was in France. The clothing offering ge nerated great profit, however, the foods section did not do as well asexpected.StrategiesHigh fashion strategyTarget area European Countries, especially FranceAs Paris is the fashion capital, therefore, MS should and needs to provide more fashion elements into their foundation in social club to broaden their target market, and attract more female customers. For example, MS could hire some world famous designers to work for their European market, it could not only upmarket MSs level, but it also let MS charge premium prices on their merchandise.Advertising strategyTarget area CanadaMS nearly had new brand name has entered the Canadian market. Accordingly the brand was consciousness in one biggest weakness in Canada. Therefore, MS have to spend more money in both like TV market or local news paper marketing to build up their weakness. For example, MS could have hire a famous Canadian stars to communicate to their clothing, MS they can provide some of kind of sales promotions which is weekday shopping coupons or give discount to get more customers.Multiple sales channelObjective area AllThe conventional sales channel is though local stores and mostly all of MS stores are located in downtowns areas. To promote the sales, MS need to expand the conventional channel, which have some catalogues of selling. MS can try to mail the recent while of catalogue to their customers, which would make placeing and purchasing easier and convenient.Class ControlObjective area AllGood quality is a strong point with MS, its also the reason how MSs has high customers maintenance. However, because of the low supply chain in Canada, MS products unbendly became decreased and damaged the sales of MS. As a result, MS should closely control the market supply chain to have guarantee of the value. TO decrease the operating cost MS may have even more trade materials and goods from Asia or Europe.EvaluationThe evaluated have been implemented not after it has occurred, so to discover if the interference having desired exertion. This would be involve evaluation and after pass completion evaluation. These both provide the organization and the feedback about the intervention.Evaluation expected at the guiding this can be called implementation feedback and assessment of interference is called evaluation feedback. carrying out feedback comprises collecting data about facial appearance of the intervention its result and feeding them back in short intervals.Evaluation advice involves to collecting data effect terms of about to effect intervention which are takes long feedback intervals.The problem of the nature organization develop interventions makes them very fractious to evaluate. Very few of OD interberatnre are driven by the theory or designs which make it difficult to interpret cause and effect. As does that fat they never been haven separation to other activates and changes in the organization.I DO NOT UNDERSTAND THE ABOVE SECTION However, OD interventions can be aided by applying the following guidelines amount should be derive from the theory intervention original the interventions and include events of the skin of the interventionselect right variablesdeceitful good events e.g. operationally clear, dependable and official explore plan e.g. quasi trial designs.Critique of strategy ChangeEvery change of situation is different, and different techniques and greetes for change need to be managed accordingly.. Although this is discussed earlier, the Models considered for the changes to give expertness to the strategy on the each situation only in the general of way. As a result, the individual different of the situation goes on flexible advance.The change of models balanced change through Fairley stages- yet, when you consider the impact of change princess, it could be considered as disordered. Intervention involves of changing the individuals goals, introducing the new evens, and having changes that do not fit to norms business. new(pre nominal) condition it may also come to change emergence thorough management which is not part of the original of plan of change.There is no hard confirmation that effect of planned on business performance as evaluation is very difficult and imprecise.Consultant facilitating planned change their own business favorite biases that will influence the operation and intervention used. Lack of the open mindedness and awareness may cause the ineffective decisions for change.The planned change the strategy approach involved long terms, but its often case organizations want to be fix solutions with immediate results. This can be leading the corner in strategy to development or unfortunate alternative being used.DO NOT UNDERSTAND THIS SECTION Strategy PlanHarris and Walters (1992) model of store positioning, based on the four overlapping circles of merchandise characteristics, transaction format, customer serving and customer communication, is proposed to be central to the competitive strat egy of multiple retailers (Figure 1). They suggest the four factors act to create the market positioning of a company and provide detailed flowcharts and descriptions for each contributing factor. Moreover, they link store positioning to critical success factors, such as sales revenue gross profit and gross margin and sales per square foot. This framework is extremely useful in exploring the recovery of MS. The first step was to take the company back to basics by reviewing the strategy to ensure that the offer for the target audience was right. This led to the plan, where the main goals were to get the settle product for the various customer groups, to implement a lag training programme to improve customer advantage, to refurbish the stores, and overall to communicate all of this to customers.The record of MS was built on quality, reliability and service. Suppliers were nearly all UK based with long term contracts. However, when firms such as Next, Top Shop and George started t o outsource from the UK, they could be far more competitive on price, providing more fashionable clothes with ranges that were changed frequently, due to Quick Response methods (Birtwistle, Siddiqui and Fiorito, 2003). This led MS to source from abroad but they failed to pass on the increased margin to the customers, hence they remained uncompetitive. Customers viewed the clothing ranges as unfashionable, unattractive and over-priced. During 2006, there was a launch of the new focused ranges of womens wear, and an expansion of the Per Una brand was launched, created by George Davies of Next and George at Asda. This undoubtedly improved the image of the brand and increased MSspace. When Stuart ruddiness became the Chief Executive, MS had 16 fashion sub-brands, quality and styling was indifferent to the competition, and due to the lengthy supply chain fashion trends were missed (Rose, 2007).In their new strategy, MS continue to use world wide suppliers with relationships based on pa rtnerships rather than the previous paternalistic management style (Khan, 2006). This has enabled the firm to reduce supply chain costs by 100m (Rose, 2007). For the clothing ranges, MS invested in the design process and product development, and intensive staff training too, giving the teams full product control, making the company more agile and enabling lead measure to be reduced, giving increased flexibility and reducing stockholding from 4bn to 1.3bn (Khan, 2006 Rose, 2007). However, it has forced suppliers to take on increased risks by having to be very flexible, producing short runs and by storing fabric and stock (Birtwistle, Moore and Fiorito, 2006). Every week Stuart Rose reviews stockholding and supplier commitments to ensure that price points and quality are right and he has implemented a new strategy of good, better, best ranges, each representing good value (Rose, 2007). To create products to the various customer groups the Customer Insight unit holds regular focus gro ups where customers are provided with samples of goods. For instance, to understand the requirements of the older consumer, MS invites in the members from the Womens Institute to give honest, highly opinionated advice (Woods, 2007)Customer ServiceFor many years MS customer service was based on the halo effect of their liberal returns policy. Moreover, they were not used to have fitting rooms and did not accept credit or debit cards, and even when they did introduce them, they did not communicate this fact to their customers. MS is aware that customers have become more demanding with higher expectations in terms of service and that they had become less competitive in the rates they were paying shop floor staff, hence they found it difficult to recruit quality staff. A customer service programme was created by Mary Gober and implemented in 2005. All 56,000 members of staff attended and this training is ongoing. The key center is that the customer comes first, by making shopping mall contact, providing excellent service in key areas such as the fitting rooms, at the till and information areas, and in the cafs (Anon, 2006). For example, all staff should be able to handle queries on fashion trends, sizes and pricing, fittings and alterations, offers and incentives. MS also increased the number of staff in areas such as shoes where customers need more assistance, and this investment in product and sales training for shop floor staff is seen to be paying off.Trading FormatMS had been very slow in taking up the trend to move to retail parks (Khan, 2006). and many of their smaller stores have not been refurbished in recent years either. Davies and bear (1989) argue that the best way of getting consumers to re-evaluate the product is to undertake a store refit. A plan to modernise the stores was implemented in 2006, and the first catalogue out of the new format began. In the first year MS spent 500m and they planned to spend an additional 800m in the next years (Fle tcher, 2007 Rose, 2007). The process consisted initially of improving the store environment by taking away the shortage or embracement of signage. This was followed by a number of new store formats, hence, an order for 100 new escalators, 100 lifts and 20 miles of new refrigeration units was made (Rose, 2007). The improved product offer, the service and the increasingly attractive store environment has led to 16 million shoppers visiting the stores each week (Marks Spencer, 2007).Customer CommunicationIn general, customer communication is further achieved using the in-store magazine. First forays into advertising went drastically wrong when their TV campaign pictured a naked women, size 14, running up a hill. This sent a completely wrong message out to their customers (Khan, 2006). Today they have become the leader in retail marketing communication. The first advertising campaign during autumn 2004 featured the food offer using mouth watering food photography and a sensual female v oice-over stating this is not just food, this is MS food. This TV campaign presented an entirely new format, which has been dubbed food pornography. For instance, the chocolate pudding advertised just before Easter 2005 increased sales by 3,500 per cent, and as Steven Sharp said at the time it makes you want to lick the telly (Martinson, 2006).When the clothing range had been reviewed and new lines introduced the spring summer season was preceded by a strong advertising campaign which include TV, radio, cinema, print, posters and even five MS branded taxis. This was very successful and attracted customers into the stores, thus, sales and profits increased. A number of models present the MS look such as Noemie Lenoir, Laura Bailey and Myleene Klass. Now anything worn by Twiggy, the 1960s fashion icon, Erin OConnor or Lizzy Jagger, the daughter of Rolling Stone Mick Jagger sell out in days. The attractiveness of the marketing campaign is that it appeals to all age groups. Whereas the womens-wear range is presented by models, the menswear range is promoted by celebrities such as the comedians Jimmy Carr, Martin Freeman and Bob Mortimer and football pundits such as Alan Hansen, Ian Wright and Jamie Redknapp. Bryan Ferry the voice of Roxy Music is the face of the Autograph range for men. The 2006 Christmas campaign last year featured the Ice Hotel in Sweden with Shirley Bassey, and David Bailey did the photography to give the campaigns fashion credibility (Brown, 2006). The success of these campaigns can be measured not only in sales but also by the number of retailers such as Matalan, Debenhams, John Lewis Partnership and Next, who are now actually copying the format.Recently, the look behind the label campaign promoting fair trade products, environmental concerns and customer health has increased consumer perception of the organization. This helped to attract 350,000 new customers a week into the stores (Brown, 2006). MS was awarded Company of the Year in 2006 a nd the Responsible Marketing Award in 2007 by Business in the Community. The marketing expenditure for the year ending 2007 was 145m, of which approximately half was spent on advertising (Fletcher, 2007).ConsolationThe recovery plan appears to be working well, as shares peaking at 7.49 before the announcements of the results in May 2007 (English, 2007). The year end results to March 31st 2007 showed an increase of 28.5 per cent in profits to 965.2m, with a 6.1 per cent increase of like-for-like sales to give credence to the five year recovery plan due to be completed in 2009 (Table 2). MS has 520 stores in the UK and has plans to open several Simply Food format stores as well as some out-of-town retail outlets, and they plan to employ an additional 10,000 members of staff (English, 2007).MS has been more successful than other retailers in using integrated marketing communication methods to get its message to both, disaffected past and present customers, increase brand equity and sup port the recovery of the firm. The advertising campaigns have been a strong contributor to the re-evaluation of MS as a retailer and have helped to increase footfall and the conversion rate. It has also led to Steven Sharp achieving a number of marketing awards, such as the Marketing Societys Marketer of the Year 2006 the Marketing workweek Effectiveness Awards 2006 and the Chief Marketing Officer of the Year award at the Global Marketer Summit in Frankfurt in 2006. In January 2007, Stuart Rose at last used the r word and stated the business was now well into the recovery phase. However, in a very competitive trading environment, turning the short term recovery into long term growth will be more difficult and awaiting to see the direction of the long term strategy.ConclusionReferencehttp//annualreport.marksandspencer.com/operating-financial/ms-international/ms-international.aspx