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_Marks &Spencers _
By: Minesh Patel
Marks &Spencer are one of Britains largest high street retailers, they sell
various good and services, some of these include: · Clothes · Food · Furniture
· Loans They were at one stage Britains largest retail outlet; they usually
have at least 1 store in every town if not more. However recently the group
has been facing their worst times ever. The problems began at the start of
this financial year (April 99). The problems to date so far include, their
profits halved, they have lost some of their best directors, they are nearing
to financial ruin, and yesterday they reported the sharpest profits decline in
its history. These recent events have caused damage to Marks &Spencers
market, profitability and organisation. Market: Marks &Spencer have lost
their summer season income due to poor timing, last years summer collections
did not reach the stores until late august by when it was too late. This meant
that customers had to go elsewhere to find the products that they needed. Then
again the same problem occurred with the winter products, which hit the stores
in late November by which it was to late, once again. This means that Marks
and Spencers lost a huge market share due to poor timing, and this has cost
them dearlyOther factors also affect the consumer, some of these include:
· Marks &Spencer do not take credit cards this means that some customers would
find it inconvenient to shop with them. · Marks &Spencer tend to be quite
expensive in comparison to other retailers in the same field. · Mars &Spencer
do not sell any clothes other that the St Michaels label and these may be of a
fashionable nature however the brand may not appeal to younger generations nor
the designer label conscious. Profitability: Marks &Spencer have not been able
to make high profits due to: · Bad timing over the past year · Lack of variety
in their clothing departments (labels) · Over pricing of products thereby
loosing the competitive edge to other firms. Organisation: As I have
established earlier, Marks &Spencer have had poor timing, this has been highly
due to poor management. The M structure has been described as autocratic and
uncertain. Recently their board of directors have been coming and going which
has lead to poor communication, which in turn has cost the greatly. They have
recently elected a new chief executive, Peter Salsbury. When Salsbury was
elected chief executive investors expected him to produce a quick fix to all
of Ms problems. However this has not been the case, since then the group has
under gone huge 3 day long conferences and produced a 700-page strategy
document. However even by enforcing these new strategies they have not
persuaded any of the shoppers to come back. External Factors The group are
also faced with numerous external factors that will put extra pressure on
Salsbury and his team, these include: · Time it has been predicted that if M
continue on the road they are, it will take 10 years until they have fully
recovered and are earning billions again. · Finance is also acting as a
constraint, as their budget has been dramatically reduced they will have to
find some efficient method of running the company whilst minimizing costs.
· Labour is also going to be a problem this is due to the fact that they have
terminated the contract that they have had for a lengthy period of time with a
clothes manufacturer in the Far East. Now M are going to have to find another
manufacturer who can produce quality garment at cheap prices. · Competition
from other firms in the same league of the business are attracting Ms
customers, some of these firms include: · John Lewis Partnership including
Waitrose · Debenhams · British Home Stores · House Of Fraiser Aims And
Objectives: Marks &Spencers have now got to set some new aims and objectives
if they want to make some quality decisions. As M is a very large group
Salsbury and his fellow board of directors will definitely set these
objectives. The original objectives set by Salsbury included: · Introduction
of sub brands in addition to the St Michael label · A new marketing strategy
for overseas and food business However after wasting a lot of time these
objectives were revised and now they have set one clear objective, named clear
view. This is basically trying to persuade people to shop at M. This may
involve: · Introduction of new brand names · A marketing strategy for the UK
· Accepting credit cards · Sharper price reductions · Targeting new markets
(age, gender etc) Alternatives There are various alternatives available to M
these include: · Merging · Sell business · Concentrate on core business
(clothing) · Change image · Introduce branding Advantages Disadvantages
Merging Would solve financial problem immediatelyCould forge important
relations with other companies Loose their IDLoose control over businessCould
create job losses Sell Passes problem on to another group of people Does not
solve problem Concentrate On Core Business More money available to spend on a
concentrated department Loose sales in other departments Change
Image Encourage new customersChange for modern times Reputation at stake
Branding Encourage new customers Loose sales in St Michaels name What
Decisions Have Been Made? M have made numerous decisions, however at the time
of writing this report the only ones available to my knowledge are: · 5% Price
cuts on all products · The launch of their first marketing scheme These
decisions have been made to meet the requirements of the objectives set. As M
want to persuade people to buy from them they need a good well thought out
marketing scheme to make sure that they are well known again. Price cuts will
also attract more customers and as they know that they are getting M quality
they are likely to find this appealing. Recommendations: M have made some good
choices in advertising and price cuts but there are some more recommendations
that I would make: The price cuts have not been dramatic, only slight changes,
I think that they should try for 15% price cuts and attract a market again and
then slowly reduce the cut to about 5% over a period of years. Perhaps in
their advertising scheme they could unveil a new modern image that M has never
shown before. They could start accepting credit cards, as these will attract
shoppers who are looking for speed and convenience They should also change
their policy on returns of clothes which are currently to dispose of, them via
incineration, this could be changed. If the clothes are still perfect they
could be resold however if they are if an unacceptable standard they could be
sent to charity shops to sell.
_Bibliography _
The Times, Daily Telegraph &Various Business Studies Books
Word Count: 1140
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