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The original concept of Don't Ask The Price - It's a Penny was a sign put up by Michael Marks who was the founder of the business and he was a Jewish immigrant and had his business set up first in Leeds as a market stall and the main problem that he faced was the English language. But soon Michael Marks changed that disadvantage towards his success by introducing Don't Ask The Price - It's a Penny concept where he provided the widest range and best quality products that he could find for his customers.
Though the concept was originally created to over come the language barrier which was a hindrance for business but i turned out to be a retailing mantra whose strength grew from the first time it was introduced. It not only provided a solution to the language problem but also attracted and captured customer imagination which made it a popular concept.
When looking at the concept in todays world it gives us a new idea it worked wonders at those time as it was the first concept of its kind which captured peoples imagination as it was new and costumer knowledge on products as a whole was not as in-depth as it is today. The number of producers for a particular product have become so many that one general concept like that of Michael Marks will not function well and in todays market the price of a product also determines the value so bringing down the price of many products could backfire and in todays competitive market communication plays a vital role thus by discouraging by not asking the price could provide to be unfriendly.
VALUE FOR MONEY is a global concept that is providing costumers with the best value for their money. Marks and Spencer provides this facility for their costumers in many different methods. Credit cards are provided which provide very low interest on money borrowed through the card. Charge cards are also provided which makes shopping with Marks and Spencer more easy and much more rewarding by providing triple points on the card when used for purchase. Marks and Spencer also provide travel insurance and loans at low rate of interest. Marks and Spencer allow their customers to purchase stocks and shares so they can enjoy the returns provided and allow them to be a part of Marks and Spencer.
RESOURCES AND CORE COMPETENCIES:
Marks and Spencer have a variety of identifiable strategic resources which have proved to be very useful in meeting important customer success factors thus keeping the customers happy and also by providing profitable long term returns for shareholders. These strategic resources are
The wide range of goods provided for customers under one roof which is a great value for money and coupled with this the presence of their own brand products which also provides the boost necessary. The outlook of the store also plays a very important role in attracting the customers and there should be clean and clear displays of products in the store which would create an easy atmosphere for the customers.
The image that Marks and Spencer portrays to its customers should be maintained at all cost this image is seen globally by all customers. The knowledge that the staffs impart is also very important as they have to be accurate and be respective towards customers will want to return. Vast customer knowledge and commitment service are also very important concepts that form one of the most vital links that keeps up the customer inflow into the organization.
The concept of expertise on process is viewed very closely as it is performed at regular intervals for example changing or removing expired food products. This also includes the smooth management of supply chain which makes sure there is always the right amount of stock and there is smooth running of the organization.
This is the planing of the organization according to the resources the proper allocation and determination of these will lead to the smooth functioning of the organization and strategic vision looks at what and whom to be produce and how to flourish on what is being produced. This concept is very important as it looks at the key features of the organization.
Marks and Spencer is a well known retail brand which is one of the largest retail organization in the whole of UK. It portrays a clear image and style which is the organizations reputation. It is governed by protective corporate principles which makes it a tightly knit organization.
SWOT AND PESTEL :
STRENGTH: M&S not only provides what a retailer normally provides but also a lot of other facilities for their customers like credit cards and charge cards which give the customers a lot of advantages and also other aspects like issuing stocks and shares which can be bought by the customers.
WEAKNESS: M&S for the past few years has seen the CEO of the company being switched to many different people this when viewed from outside the organization proves to be a sign of weakness
OPPORTUNITIES: M&S have provided opportunities for people both inside and outside the organization they have provided their employees with different roles such as head roles, administrative roles. Opportunities for their customers are given by providing stocks and shares which can be bought by them.
THREATS : M&S have had threats all through the time of its existence the most common threat is from the excessive competition for resources and customers this threats can also posed by substitute goods.
POLITICAL - Political factors have always had an influence on all organizations but after the free trade agreements and the euro integration the markets have opened for british organization to bring in the capital to eastern europe for example Tesco is supposed to have around 60 hyper-stores in Hungary.
ECONOMIC - Economic rates are most likely to fluctuate especially as economies around the world are still recovering from the blow that started a few years ago. Retail industry was also heavily dented by the economic slip ups but once again the industry is coming back.
SOCIAL - This kind of change deals with customer taste and preferences and this holds both threats and opportunities as change in taste could give the opportunity that the particular product.
TECHNICAL - Technology has always made transactions better and faster for example sale of clothes over the internet is a very big and successful market and technology has always made transactions easier.
LEGAL - All retails and organization have to be approved by the health and safety and in case of retail all resources that are used for production should pass all legal tests.
ENVIRONMENTAL - The raw materials used in production should not harm the environment and also raw materials from livestock should be treated with legal care as if not looked after then it will turn into a threat.
A. M&S's management strategy involved diversification of wide variety of product ranges along with all the other products maintained M&S's own brand St Michael was seeking to be used efficiently. Almost all products carried the M&S symbol or their brand St Michael but at the beginning of the millennium the company wanted to represent the brand name in
a more prominent way and this was time from which the name of their own brand St Michael was slowly being dropped off. One of the most efficient work done by M&S
was they started to innovate at the same time upgrading and adding value to the products at hand. M&S's other changes where when they found already established shopping buildings too small they made the necessary changes and they created spaces in buildings by moving out stockrooms to make them bigger and transfer the stock to wear-houses outside the city.
The strategic changes mentioned in the case that made this growth strategy possible are
CONSTANCE IMPROVEMENT IN DISPLAYS To make the products more user friendly and to increase the number of products in store the concept of "sales per square feet" was introduced and was successful.
ELECTRONIC POINT OF SALE (EPOS). Information technology was used to rise levels of productivity and the use of IT in fashion department worked wonders as their staff pay was just a part of their turnover and this caused them to earn better profits than their competitors.
THE DEVELOPMENT OF SUPPORT FINANCIAL SERVICES, Setting up unit trusts and M&S where responsible for creating the third most popular credit card in the UK which was their charge card and the business was sold later.
INTERNATIONAL GROWTH in many countries around the world is growing at a medium phase and there were mistakes made during this process sales have not been reaching where the were suppose to. M&S tried and failed to sell the super market chain the kings it owns in America.
threats from potential entrants Porter explains that 5 force jointly affects the business and threats from potential entrants is the primary attack on any established business and the factors that makes it the first of porter is the potential entry of high capital being brought into the business and the customer confidence on the potential entrant are the deadly pair that can break an established business.
threats from substitutes this is another most likely of the threats as for example if M&S produce branded food products that could be sold by other retailers.
bargaining power of suppliers this kind of threat is low at the market as there will be other suppliers in the market who will be willing to sell a t the price which was dropped. M&S in particular do not make contractual agreements with their suppliers but act according to mutual agreement which could cause serious problems.
bargaining power of buyers this type of threat is where M&S or any other organization in the food retailing industry is the strong one as there are many alternative suppliers this is the reason for such a aggressive price rate.
rivalry force this exist where there is entry of a business. Rivalry is when all the other 4 forces start their respective effects on the business. when there is a threat of substitution and the attempt to control the market by buyers and suppliers the above could be said as the reason for rivalry usually being in the middle of the diagram.
A. The factors that caused Marks and Spencer to slide down in sales are
'Taken its eye off' this became a problem when M&S did not concentrate on the field it had to this was one the important causes for the decline of M&S . M&S's attitude changed which made them over reliant on their own image which in turn lost its customers.
Become too reliant on suppliers this can be tracked back from the start of the organization as their motto was not to have a contractual agreement but a mutual one which did not work very well and as M&S became too reliant with suppliers especially UK based this lost the competitive pricing strategy which in turn drove down the number of customer.
Allowed margins to increase gradually, this was what drove M&S to go against what it stood for, at the time of its origin the sign next to the goods read Don't Ask The Price - It's a Penny this was what M&S was all about but after 1990's after the margins increased destroyed the long kept money image of M&S.
Lost some of the fashion element this was an issue when the average age for clothes from M&S was considerably high which made it clear that even the clothing line was sliding down in sales which ultimately dented M&S's profit.
My reasons for the decline are from the origin of the organization the non contractual deals with the suppliers could have been avoided which would have brought the contacts to paper which would have been much better to manage.
My next point is that the hand over of the organization to a non family member for the first time should have been pushed back to after two years i personally think that would have stopped the M&S's 1990's decline.
As the new manager i would like to suggest the following two strategic approaches are
Ansoff's Growth matrix and Balance Scorecard
Ansoff's Growth matrix consist of four concepts they are
This type of strategy concentrates on the business selling the goods at hand into the existing market by the use of this strategy we can increase the already existing market and make sure the product has got a good hold on the market. This type of strategy can also restructure a mature market by driving the competition off the market. The same can be used to increase the usage of existing customers by introducing loyalty schemes .
The above is when the business decides to sell the existing products into a new market .
Exporting existing goods to new countries to try out their market and this strategy can also be put to use when trying to go through new distribution channels.
This strategy is when new products are introduced into the existing market. This concept helps in developing the product even better for a better grip for it to take on the beginning stage of the products life
In this type of concept a new product is introduced into a new market place. This concept is considered risky as the business lacks experience in both the market place and as well as the product life cycle .
Balance scorecard is a management planing and strategic system to monitor the performance and goals of the organization. Balance scorecard has changed from its early life as a simple performance measurement system to a fully functioning strategic planning system. It is customizable system which can be suited to any type of business and as it is tuned to follow a particular system thus providing us with accurate results.