grp-1_retail_case_study (2)

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CASE STUDY ON MARKS AND SPENCER

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Nimesh Jain Poonam More Anivesh Morkhe Indira Varadarajan Priyanka Mehta Ketki Gadkari Tejas Kadam GROUP NO -1

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HISTORY OF M & S M&S traces its history back to 1884 when Michael Marks, a Russian born polish refugee, set up a stall at Leeds Kirk gate market. Thomas Spencer joined him in 1894 to create marks and Spencer

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FEW NEWS ARTICLES

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Introduction of the case study For years M&S ruled the retail roost Until bad decisions and boardroom battles In January 2000 Luc Vandevelde took over as the chairman He followed tried and tested approach to turnaround Gave something new to retail market Share value doubled in the past 12 months that is 30 % since 1999

Executive Summary : 

Executive Summary Marks and Spencer is a group of companies with various ventures that include financial services, clothing's, house wares and food The case discusses the problems faced by the British retail giant due to foray into financial services, internal power struggle and inability to replace its core customer base It adopted a global supply chain and restructured its global operations by divesting some stores to emerge out of its troubles

Cont.. : 

Cont.. Founded in 1884 and the retail chain grew comfortably within and outside Britain Marks & Spencer ruled the retail roost, and reveled in profits quarter-after-quarter Some bad decisions, complacency and boardroom battles took the company away from the glorious days Because of competition, over year its products become outdated and a fallout of all these was slumping profits

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The reasons behind Decline Problems of its own creation E.g.- Pointless Expansion Boardroom Tiffs Few outsider in the board Narrowness of experience

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Cont.. On demand of investors the jobs of chairman & chief executive split In February 1999, Mr. Peter Salsbury became Chief executive He reorganized the company by including a new global supply chain, getting clothes made wherever costs were lowest in the world Hired 12 teams of management consultant

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Cont.. In January 2000, Vandevelde was taken in as chairman A major and long desired change he brought in was the company’s refocusing on its 2 pillars of strength: Lingerie & food Now the company is growing in various fields

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SWOT ANALYSIS

STRENGTH : 

STRENGTH Sales of clothes have stabilized, and food sales have increased Total group sales up 3.3% with food sales up 2.7% New chief executive with fresh ideas and sales led growth Good advertising Used iconic models to attract core target group. David beckham George Davies Product diversification – home and furniture Turnaround in sales and growth

WEAKNESS : 

WEAKNESS Previous poor performance, seven straight quarters of falling sales More expensive than other high street stores – limited market. Focusing on older generation may lose younger market. Focusing more on ready to eat meals which results in losing precious ground

OPPORTUNITIES : 

OPPORTUNITIES Rebuild the company’s image with continued advertising such as the successful M & S food adverts Focus on core market UK has an ageing population Introducing wider ranges such as Per Una, Autograph and Classic collection to stores Use younger more contemporary models to attract younger generation. Internet food shopping but opportunities may be limited Other services – eg banking, insurance, savings etc.

THREAT : 

THREAT Previously tarnished reputation and image Competitor product ranges which directly compete with M & S food such as Tesco finest Decline of the high street May lose youth market General increase in internet shopping Social tastes

FACTORS THAT AFFECTED THE GROWTH : 

FACTORS THAT AFFECTED THE GROWTH Marks and Spencer’s troubles were more of its doing than its competitors. Over the years the products became outdated. The company went in for pointless expansion at home as well as in France, Germany , Spain and Belgium. They also moved into areas such as mobile phones and jewelry's.

FACTORS THAT AFFECTED THE GROWTH : 

FACTORS THAT AFFECTED THE GROWTH Along with these strategic mistakes they faced some operational and supplier related problems. They lost on cost advantage over their rivals by continuing to buy clothes from domestic suppliers. Apart from competition and strategic blunders ,corporate governance and inward looking culture were the issues responsible for the decline Narrowness of experience of Marks and Spencer’s senior managers and board of directors. Boardroom problems

How they solved it? : 

How they solved it? Turnaround: Re-kindling the spark Solving boardroom problems Selling off non performing businesses Concentrating on strengths: Clothing and Food Hiring young personnel's and improving company's culture Heavy advertising

The Pay-offs : 

The Pay-offs Rise in sales Rise in profits and share price Repayment to shareholders

FUTURE FOR : 

FUTURE FOR MARKS & SPENCER

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Company has done well, but it is still going to get tougher from now. Due to cut throat competition and conflicts along the boardroom it could be difficult for MARKS & SPENCER to sustain in the market. But…… By resolving their conflicts and formulating the new strategies would help them sustain and grow because of their BRAND NAME.

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Some new strategies could be Expansion of their business interest in home furnishing. More efficient supply chain, which delivers improvements in quality, appeal and value, this strategy would streamline the supply chain activity to its optimum usage and substantially reduce costs. Refocusing on two pillars of their business i.e. food and clothes. Refocusing on ready to eat meals section and new avenues and franchise options to be explored. Use of iconic celebrities to advertise their products.

Conclusion : 

Conclusion