MARKS AND SPENCERS

A strategic marketting tool that links a firms marketing strategy with its general strategic direction presents four alternative growth strategies as a table(matrix). These strategies are seeking growth:

(1) Market penetration: by pushing existing products in their current market segments. (2) Market development: by developing new markets for the existing products. (3) Product development: by developing new products for the existing markets. (4) Diversification: by developing new products for new markets.

Ansoffs Matrix can be used to define e-marketing objectives and use the internet for targeting new geographic markets, new customer segments; to support diversification into related and unrelated businesses; for market share growth, customer loyalty and value improvement; and for adding value to existing products. Objectives contain three elements: 1. The attribute that is chosen as a measure of efficiency. E.g.: Increase 2. The scale that you will use to measure the attribute. 3. The value on the scale which the business seeks to attain.

Marks and Spencers is one of the biggest retailers in the UK. They have been able to diversify from clothing into other areas such as home and food and emphasis Quality at Affordable prices, but this hasnt always been the case as well see.

In this part, we will examine the resources and competences of M&S using the following model:

Easy to imitiate
resources Threshold resources

Difficult to imitiate
Unique resources

competencies

Threshold competencies

Core competencies

A. Threshold Resources: Threshold resources are requirements needed to exist in the market. M&S, as a retailer, has nearly 300 stores, in which there are experienced staffs serving different customers. The company has long-time suppliers, which are essential to assurance the high quality of products. Furthermore, as a listed company, the organization has enough financial sources to fund its operation. B. Unique resources Unique resources are crucial to underpin the competitive advantage. M&S, in the market, has unique brand awareness. The brand is deemed as the symbol of trust and quality. Facing decrease in performance, the company reacted by employing an experienced CEO, Luc Vandevelde.He emphasizes on building a flatter company structure to improve the decision-making environment and to improve customer relationships.

C. Threshold competences Threshold competences are essential to stay in the industry. M&S provide retail services along with financial services, domestically and globally. Facing the intensive competition, the company has to adjust its purchasing systems and starting global sourcing to reduce the cost of sales. M&S charges rents for each individual store, in order to make store managers more accountable for their branches performance. In addition, they group the stores on the basis of demographic characteristics and lifestyle pattern instead of allocating merchandise depending on floor space. D. Core competences Core competences are activities or processes that critically underpin an organizations competitive advantage. There is no clear core competence held by M&S, but the new CEO thrives to it up in order to recover the market share. He emphasized on building a flatter company structure to improve the decisionmaking environment. Another point is that he wanted to create a customer oriented organization. In general, the analysis outlined shows that M&S has enough threshold resources and competences, and even some unique resources.

From the case, we can identify that "clothing" and "food" are the two major industries M&S is involved. The pace of technological improvement and the speed of global communications mean more and faster change now than ever beforeolved in. Unfortunately, M&S seemed to have done this poorly, as analysts commented: M&S ignored the changes in the marketplace while its competitors quickly reacted to changes. The reasons should be analyzed by looking closer at the micro environment.

Bargaining power of suppliers in most clothing segments is relatively low but when purchasing cloths from luxury designer firms, the bargaining power tends to be higher. M&S previously had only British suppliers for its claimed reason of high quality, but later on it outsourced globally to lower the cost. M&S was no longer reliant on particular suppliers and therefore the bargaining power of suppliers is lowered. M&S mass purchase also leads to lower the bargaining power of suppliers.

B. Bargaining power of buyers Bargaining power of buyers is high. Products are usually designed for the nonprice-sensitive people who prefer quality and fashion. People are more price-sensitive. And normally they can choose from a variety of companies. Thus they have high bargaining power. C. Threat from substitutes Threat from substitutes is very low. Only products from different segments might work as product to product substitutes. In times of economic recession, people may shifted there prefrence. And in times of economic development, people have more disposable income and accordingly more interest in products.

D. Threat from new entrants Threat from new entrants is high. Brand name and high capital requirements build up high entry barriers in, which can efficiently protect existing firms from intense competition. To provide high quality and the latest fashion, capital is required for using superior materials, modern design, superior workmanship and sufficient expertise. Brand name is also an important competitive advantage for established firms due to the brand loyalty of people in this segment. Meanwhile, low cost and low brand loyalty, resulting in low entry barriers in provide more chances for potential entrants. E. Rivalry among existing firms It seemed that existing firms in the clothing industry do not compete as intensely as firms in other industries. In relation M&S suffers more from the competition. Price-sensitivity feature is very likely to lead to a price battle which will finally squeeze out profits. A number of firms competing will erode M&S market share.

Lastly, M & S should consider the following suggestions: To conduct market research to find what really current customers want. To segment the markets scientifically. Understand and treat each store as individual SBU. To separate the food and clothing divisions into separate stores. Find cheaper suppliers for the clothing range. To introduce a new loyalty card for its customers. To have more women in its top management who understands customers well.