In this report I aim to examine Marks & Spencer's current business strategies, and prove their success in business by conducting various audits. I will be analysing current shoeshine's business crisis and their stakeholder's needs. Having considered these aspects, I will recommend new strategies which shoeshine could adapt through this regeneration program.
Marks & Spencer
For over 125 years, Marks & Spencer have been trusted by customers to offer high quality value clothing, food, and home products. Having grown from a penny bazaar stall to one of the UK's leading retailers, with more than 21 million UK customers and also expanding internationally with a staff over 78,000 and 2,000 suppliers forming the bedrock of the business, Marks & Spencer will continue to offer Quality, Value, Innovation and Trust. (Marks and Spencer plc., 2009)
To be the standard against which all others are measured.
To make aspiration quality accessible to all.
Quality, value, service, innovation and trust.
Marks and Spencer's corporate objectives are incorporated in its mission statement. It beliefs and values are outlined as "Our customers continue to see Marks & Spencer as the place to shop for special food, produced to exacting standards".
Their aim is to uphold their vision, mission, and values throughout the international expansion of the company. The CEO of Marks & Spencer explains that their aim is to 'Ensure we meet our customers' needs with appealing, superior quality products at attractive prices.'(Marks & Spencer, 2009)
Marks & Spencer in the UK has an image for reliability and quality, underpinned by staff training, product, and quality specification. Control at supplier level and strong corporate values supportive for the quality image, portrays M&S against their competitors as using differentiation strategy. (Johnson., Scholes., 1999)
Marks & Spencer have implemented some robust strategies in place for some of the key areas of their retail performance. These have proven to be very successful for this modern day and age of business some of them being:
100% Own Brand: Selling only own brand products and brands exclusive to Marks & Spencer so it can guarantee customers the quality, value and service they have come to expect.
Segmentation of Clothing: the focus is on retaining the loyalty of core customers, who prefer classically stylish clothes and plan to segment its products across different lifestyles.
Expanding to multi channels: M&S Direct (online and catalogue shopping) is improving customer convenience and service, helping the company reach a new generation of shoppers.
Supply chain management: the management is supported by tight systems for inventory control and the development of high standards of specifications. The relationship with suppliers is a model of a genuine long-term partnership, involving a commitment to assist suppliers to improve.
Internal communications: The 'top 100 briefings and director breakfast club' was introduced to bring the managers and employees together more regularly. This increased communication and information flow between departments, from the boardroom to the shop floor.
Staff motivation and developments: The Company has made investments in this particular department to make sure all staff are trained to highest needs of M&S customer's expectation and also provide a link to their key policies and sets out how employees can raise their concerns. An example of this is the recent 'Lead to Succeed' development programme built around their brand values. This is designed to help senior leaders to develop themselves, lead their teams and the organisation to drive business success. It is a critical component of M&S future people strategy.
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Shareholders: The Company maintains regular contacts with the principle investors and shareholders. That includes a postage paid topics card with the 'AGM Notice of Meeting' so that shareholders can make their views known. The company's e-commerce website is planed carefully so that shareholders can email the Chairman directly with their comments, write to them or call the telephone help lines.
There are many more strategies in place like internal audit and external audit which in return makes the company stronger as an organisation every day. (Marks & Spencer, 2009)
Marks & Spencer are proud of their brand of quality, value, service, innovation and trust which differentiate their product and services from other leading UK retailers. The company is keen to protect its reputation and has ambitious plans to broaden its multi-channel development and growth internationally. They believe in investing in the future by strengthening its team in every level, from shop floor to boardroom as they continue to grow in business.
Shoe Shine Plc, a large shoe manufacturing company which has been disadvantaged in comparison to its competitors, due to its bad business strategies and outdated technologies has led to losing control over their own market. This has reflected in their increasing cost and declining sales. To worsen the matter the staff's morale at ShoeShine is low as they believe that the management has not done enough in terms of outdated technology and communication between them and the management. In a recent board meeting the management have decided this cannot carry on and have opted for a change in the current company's strategy. They have decided to start all over again and want to do right this time around and want to consider all the stakeholders in this process. They have named this innovation project a slogan 'Change - the way forward for ShoeShine!'
The management have decided throughout this whole regeneration program that they want to take consideration of ShoeShine's stakeholders as they contribute towards the strategic development of the organisation. The current ShoeShine attitude towards stakeholders has shown that failure to account for stakeholders leads to poor business performance.
Gerry Johnson and Kevan Scholes define stakeholders as 'Individuals or groups who depend on the organisation to fulfil their own goals and on whom, in turn, the organisation depends.' (Johnson., Scholes., 1999, p 213)
Stakeholders of shoeshine plc
Board of directors
Primary stakeholders: A firm cannot exist without their continuing participation i.e. employees, management, stakeholders, suppliers etc.
Needs of primary stakeholders of ShoeShine plc
A wide range of products available for customers without compromising technology, quality and value for money would be welcomed.
A growth in sales and market share along with better profit margin.
A better vision and mission statement replacing the existing one, along with a new structure of communication within the organisation is highly necessary for more efficient tasks to be done. Better staff appraisals systems to be put in place.
Detailed goals or targets to be laid out from the board of management, along with a better and easy way of communication within the organisation is highly recommended.
Board of directors
Overall internal communication within all departments of the organisation to be improved by implementing a new communication structure, improving the sales and profit margin by breaking down the target for each department so it's easily achievable, cutting the overall cost efficiently, keeping the management motivated and keeping all of shoeshine's product up to date with the technology available in the market.
A uniformed ordering system in place so it could cope with the growing demand of ShoeShine in the future and delivering it in a more cost efficient way.
Not to interfere with their targeted customers, products or their market share.
New business strategy opted by ShoeShine plc
After careful consideration, the board of directors have comeback with strong and proven strategies to replace some of the strategies which are clearly not working for ShoeShine plc, so as to make the business more efficient and successful in this modern times. The board has ensured that new strategies implemented will involve every department which has suffered in the past so that the same mistakes would not repeat again. The management are also keen to keep updating their strategy if it requires regularly. Some of these new strategies are reflected in the areas enlisted below:
The board has developed a team of creative designers together to work in the current innovative market and develop new products with the use of latest technology available in the market for ShoeShine. This will satisfy the needs for all its customers from different walks of life as well as help ShoeShine to compete in the market to build its market share gradually.
The board has planned to change the current system which helps communication internally with a better structured and efficient I.T platform. This will as a result reduce the communication barrier within every department in the organisation and even making it easier for employee's opinion at the lower most level heard.
The company has plans to start a new loyalty program through which it shall reward the loyalty of its customers, along with offering a much wider range of products for all age groups and sex.
The board realises the delay in entering the market through this channel so in order to get a decent market share and successful first year business through this channel, they have appointed a professional team with a sound knowledge in e-commerce and heavily backed it along with some strong marketing in place.
The board strongly believe their new loyalty program introduced as part of this regeneration program and their wider range of innovative products at a very reasonable price would give the company the advantage of competing against their competitors.
The company is investing a large capital on its human resources as part of this regeneration program to motivate their staff and explain them the new mission, vision statements and giving them the necessary skills to cope with this whole regeneration program.
Control over suppliers
The board has decided to pass on more powers to the lower management in order to make the ordering system more effective by giving them smaller targets on their overheads, which in return would help our suppliers to deliver goods more effectively helping costs on both ends.
The company and its shareholders are reluctant to make a huge investment in this area to ensure the company meets its first year target in business, and in gaining market share with a sound marketing campaign promoting its new and innovative products along side its new unique loyalty program.
The board believes in this whole regeneration program and thinks that the new strategies in place for their business will help overcome their recent decline in business and their loss in market share. The board are also confident that this project can only see success that they have come up with a new mission and vision statement for their company.
Mission: to be the pioneers in designing innovative shoes
Vision: making shoeshine a global brand when it comes to shoes
Strategic problems faced by ShoeShine plc
Miscommunication within the organisation
Gaining on the losing market share
Increase in sales
Developing new and innovative products
Losing control over their costs
Decline in sales
Environmental analysis for shoes shine plc
Having a new government which has just been elected and keen over cutting government expenditure to reduce the national deficit; it might be even harder for any grants or loans from the government for shoe shine in the near future.
Currently the economic outlook is very uncertain and this is more than likely to affect retail sales, as people do not have the spare cash to spend on luxury items such as clothing and food luxuries.
"Consumer purchases are influenced by cultural, social, personal and psychological characteristics. For the most part, marketers cannot control such factors, but they must take them into account". Armstrong, G and Kotler, P (2007)
Shoeshine has to consider their customers those who come from different walks of life and satisfy them individually to increase their market share.
Shoeshine's main priority being innovative and modern products with value for money after this regeneration program.
Making shopping more easier for all shoeshine's customers by introducing a new web platform for sales.
Strategic positioning of ShoeShine plc
Positioning a company entails choosing the best strategy that is viable in the long-term and able to face competitors and maximise long-term revenues. Every retailer including Shoeshine have to choose between two strategies in order to position its company:
Differentiation: Building a brand name via massive advertising in order to get the loyalty of the customer: this strategy concentrates on advertising and it rarely uses promotions to sell its products since promotions only attracts non-loyal customers who are searching for cheap bargains. I.e. Marks and Spencer's, apple, Nike and many more.
Cost leadership: This strategy involves selling products at discount prices in order to encourage customers buy more and attract new customers who are looking for cheap bargains; this strategy is followed by H&M, Primark and many more.
There is a trade off between sales and advertising campaigns, the both should be mixed in a way that could help the company achieve higher profits. Fashion retailers could not have high level of advertising and high level of sale promotions. Advertising is considered an expensive investment, which aims to increase the turnover in the long-term by increasing brand awareness.
Sale promotions are considered the quickest way to sell the remaining stock of clothes and getting cash to get new range of clothes, sales promotions involves sacrificing profit in order to get quick cash. No fashion retailer could afford advertising and making sales promotions at the same time because his profit will be cut twice.
Considering the above two strategies and currently shoeshine losing its market share, I have recommended that shoeshine adapts to the 'cost leadership' strategy. This is more effective in terms of making its product more recognised. After gaining a profitable market share it would be advisable to start entering a 'differentiation strategy' by increasing funding in its advertising campaigns.
Having examined different reports surrounding business strategies from various retail companies such as Marks & Spencer's, and having conducted various audits to prove them successful, I have come to the conclusion that the highlighted strategies and analysis will regenerate ShoeShine Plc. Furthermore, considering that similar strategies have been implemented to ShoeShine Plc currently can only make them successful and rebuild on its market share.
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