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Critical success factors: Marks and Spencer

Paper Type: Free Essay Subject: Finance
Wordcount: 1555 words Published: 25th Apr 2017

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Company Background

In 1894, Micheal Marks, created a joint venture with Tom Spencer to enter the retailing business (company website). In 1904, the first shop opened at Cross Arcade in Leeds, West Yorkshire. The Marks & Spencer (M & S), celebrated their 120th anniversary in the year 2004 and for company’s chief Executive position, Stuart Rose was appointed. The company was originally headquartered in Baker Street, London for many years, but later it shifted their registered office, at Waterside House, Paddington. At present, the company runs worldwide 600 stores, of which in UK alone 450 are located and 150 outlets remaining operating in 30 countries around the globe. In the year 2005, the company sales was amounted to US$14.6 billion with a market value of US$ 11.6 billion and profits at US$1.1 million and total assets of the company was US$8.1 billion.

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In retailing industry, Mark and Spencer are successful for several reasons. First, in terms of market understanding, they have created brand image, and provided a clear image to the consumers. In fact, their market strategy was not much deviated and thus much focused and moreover, they haven’t confused the consumers with competing brands. Another contributing factor to their success, was their proactive approach to human resources as in the UK, since many employees belongs to Marks and Spencer. In addition, it is likely that future employees and customers are familiar with current employees for Marks and Spencer who would be active in the decisions that in turn affect their jobs. Marks and Spencer’s one of the critical success factors is that they understand their customers by offering good value for the prices they charge rather than focusing only on price. Furthermore, the company could assure the same level of quality for goods throughout all their stores firstly, by using brand of St.Michael throughout the store and secondly, with their suppliers, they have exercised considerable control (by virtue of their size and the influence they have on their vendors). Marks and Spencer, relationship that has with its suppliers would be good for the company, however, for the suppliers, such relationship is difficult. Since company maintains such large customers that could dictate terms and conditions, but if it came from other customers, that would not be acceptable by the company. The company’s other important critical success factors are efficient supply chain activities and an appropriate store inventory system.

Main Organisational Challenges in Managing Global Supply Chain

Today, a corporate challenge for each and every organization facing would be the acquirement of customer loyalty. Increase in competitors, expansion of market place, and provision of profitability by the customers would all work towards the advantages of the host organization. In addition, change in business pattern made customers to change their buying behaviour too. In order to meet the change in demands and address the change in consumer behaviour, organization administration had shifted their attention towards customer oriented for the purpose of being successful in business. To be success in the market, the company’s need to entirely reformulate their predictable outlook of their business and shift from process-focused to customer-centred is an important leap towards competitive edge and service efficiency. In today’s business environment, with the advancement of technological innovations, logical decisions about delivery operations, warehousing, stockholding and scale of economies get more complex solutions. In managing the global supply chain, the following are considered as main organizational challenges.

Innovation of products and development – In order to survive in the competitive world of growing market of the business, the efforts wield in hunting for opportunities which are of potential in terms of profit making and development of new products based as per the requirement of target market would be valuable. In general, before started operating a profit-oriented company, there must be products that is being offered. The change in preference of the consumer and their lifestyle prompted each and every company worldwide to target on their offerings by creating innovative products and improving their existing products.

Superior customer service satisfaction: Experts from the Marketing field stated that “in achieving business success, all you need is a customer” (1998). In addition, they further explained that the concepts and theories are no longer necessary on how to manage the concern and problem solving is also not guaranteed to be efficient.

Effective implementation of Marketing Mix: According to … and …, Marketing mix is the “standardised set of fitting marketing variables that every business and any other profit-motivated industry implements, in order to come up with a desirable outcome or answer on the target market they choose to penetrate”. They are popularly called as 4Ps, consists of product, price, place and promotion. Marks and Spencer, and the management, used marketing mix efficiently and moreover it noteworthy to restate their research on marketing mix that with the constant research and development in all 4ps, today, in the UK retailing market, their product remained as the global leader, thus they could able to maintain their product with high quality.

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Competition: The first problem encountered in every business environment is the adverse competition. Companies always looks competitor product in a different way, as they examine their products by dismantle in different parts and compare with their own products, this tactics was used because, in order to make sure that competitor product is no way different from the existing product, if it so, then that part alone would be copied or adapted. They use this as a benchmarking and extend this concept to every process of their business. According to …. (1994), to compare performance between competitors, competitive benchmarking has been utilized, where as to compare performance of a business or production process, process benchmarking has been used, this is not necessarily among competitors. In the same way, as discussed above, if Competitor Company has a better process or operation, then benchmarking company would tried to adapt or copies to their own needs.


In order to remain in today’s global competitive economy, key strategic initiatives for companies like M&S from the point of view of supply chain Management (SCMS), are service improving and costs reduction (1998). The SCM is one of the business strategies, which focuses on the quick response to needs of ever-changing market and lead time of shortened purchasing and in addition, add values to demanding customers, who has been increased recently at the minimum time and cost (2002). Relying on a single party, would not be feasible today to fulfil the sophisticated needs of customers, thus requires a full collaboration, integration, a total commitment and synchronization among all business partners (1999).

Marks & Spencer, as a profit-oriented organization is purely dedicated to provide products, with the benefit to their employees, protects the environment, and customers who utilizes them. The firm is striving to maintain their dedication, by showing their extreme interest to both the external and internal environment in which they operates. M&S and its management, in building and sustaining supplier relationship would easily refer to present culture of supply existing culture being used by their company presently throughout the operations of long years. In order to retain good supplier relationship, integration and acquisition are potential methods. In addition, awareness increase to the conditions of subsidiaries and affiliates would determine somewhat about the potency of the company. To international success of subsidiaries, training and retention are deemed crucial (and 2003). Although the company is successful in term of customer satisfaction, there are certain critics to the company, who are really not satisfied with the business performance. As available figures and statements from expertise revealed that in order to better stay with their competitions, continuous effort has been taken to make sure that they are will be the better if not best and works above the standards. Thus, managerial decision would always work towards the company stated vision. The distinctive competence of M&S’ in terms of applications, technical expertise, managerial aptitude are the important foundation of heterogeneity, that would substantially become an factor of competitive advantage of sustainable. According to (1995), “corporate success is based on the distinctive capabilities of the firm – those things, often the product of its particular history, which competitors cannot reproduce even after others realize the benefits these capabilities bring to the company that enjoys them” (). Thus, with the effective implementation of the concepts mentioned, and competitive advantages in an organization is not beyond its reach.


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