Strategies of Marks and Spencer

Presented By: Group 2

Anu Matthew Hinal Khemani Sanchari MajumdarShilpi HotaSunil Prasad Aasma Bhasin Aakansha Agarwal

• Marks and Spencer, one of UK’s leading retailers with over 1330 stores

worldwide

• Originated more than 130 years ago when Michael Marks came to the north

of England

• Before long, he owned a market stall in Leeds which immediately flourished

• Michael approached Tom Spencer to handle the accounts

• Thus on 28th September 1894 Marks & Spencer was born

ABOUT THE COMPANY

Timeline

• 1901, Built a warehouse at Derby Street, Manchester (First headquarters)

1900-1940

• Introduction of ‘cold-chain’ processes

• Ventured into food segment

1940-1970• Introduced frozen

foods• Introduced the “A

Plan”

1970-2010

• 790 stores in UK, 86,000 employees

• Market leaders in Clothing

2010-NOW

TIMELINE

Values Quality, Value, Service, Innovation and Trust

Mission To make aspirational quality accessible to all

Vision To be the standard against which all others are measured

Product Line

Clothing Home & Furniture

Food And WineBeauty

Products

International Expansion

Bricks and clicks

strategy

Increase

food

stores• Aims to open about 250 stores

outside UK• Increase their overseas sales by

25% and profits by 40%• Priority markets are India, China

and Gulf with 1.9 percent increase in group sales

• Plans to include flagship stores in major cities and a collection of new dedicated lingerie and beauty stores

Leveraging E-commerce to strengthen brand awareness in

China and reach across the country

• Aims to set up 20 stand-alone food stores in Paris

• Expand food business in Western Europe

GROWTH PLANS

India •Important market outside UK for M&S•Earmarked 20 sites in India for the lingerie and beauty concept•In total, M&S wants to have 100 stores in India by 2016

China•Focus on entering key cities•Taken the decision to close five of its supporting stores in the greater Shanghai region•Leveraging E-commerce to strengthen brand awareness •Marks & Spencer launched a new dedicated kids-wear store on TMall.com and a new clothing store on JD.com

Middle East •Marks & Spencer Lingerie & Beauty has already opened at two locations in Saudi Arabia, with 10 further stores planned in the next two years

GROWTH PLANS

Strength •High brand recognition•Wide variety of products•It has over 1000+ stores present across 40

countries•Over 80,000 employees form a part of the

workforce globally•Organic, healthy food products

Weakness• Highly priced products vis-a-vis their

competitors• Attracts only people over 25-30 years of

age• Weakening company financials

Opportunities• Opportunities in the online retail space• Introduce clothing fo younger people• Geographic expansion in emerging

markets

Threats•Still reliant on mega stores•Competitors like ASDA, TESCO etc and

various new entrants

SWOT

SWOT ANALYSIS

Political• Liberalization in east Europe• Free trade agreements

Economic• Rising Incomes

Social• Changes in consumer tastes

and lifestyle

Technological• Internet has become a

powerful selling channel• Mobile phone shopping is just

taking off

Legal• Regulations for standard

packaging, eco-friendly material and processes of manufacturing

Environmental• Waste management• M&S has developed a program

called Plan A in this regard

PESTLE ANALYSIS

Porters 5 forces

Threat of substitutes

Bargaining power of

buyers

Threat of new

entrants

Bargaining power of suppliers

Degree of rivalry

The alternatives came from Tesco and Sainsbury as they acted on providing added value foods.

The bargaining power of suppliers is quite low when it has concentrated purchasers. Marks & Spencer outsourced, globally to reduce its cost similar to its competitors which result a lower bargaining power of its UK suppliers.

Under competitive rivalry, Marks & Spencer really faced threat as other companies entered the industry with the same quality goods but with affordable price and up-to-date fashion.

Low bargaining power due to delivering services or products to the changing demands of consumers in the market

The threat of entry looks out in terms of differentiation for Marks & Spencer to the customers' loyalty that can discourage potential entrants. Marks & Spencer has a long time developed focus that has served as an entry barrier.

PORTER’S FIVE FORCES MODEL

BCG Matrix

Stars• Men and

women's clothes

Question Marks• Food

Products

Cash Cows • Lingerie

and Nightwear

Dogs• Children's

wear

BCG MATRIX

Transforming Business Creating Value

Strategic Priorities for 15-17

BUSINESS STRATEGY

PLAN A

Performance

Risk Managem

ent

Brand Values Heritage

TRANSFORMING BUSINE

SS

CREATING

VALUEUnderstanding customersCompetitive AdvantageM&S Difference

STRATEGIC

PRIORITIES

Food Sales Growth•Availability and

choice•More stores

GM Gross Margin Improvement•Better buying

processes•Renewing old

processes

GM Performance Improvement•Newness•Quality

Strong Cash Generation•Supply chain

initiatives•Less capital

expenditure

HR STRATEGY

1. TO ADDRESS CURRENT CHALLENGES

2. TO SUPPORT THE BUSINESS STRATEGY

HR STRATEGY

TO ADDRESS CURRENT CHALLENGES IN EXISTING HR PROCESSES

HR STRATEGY

CHAL

LEN

GESHR store-to-store basis

No centralization of policy

No shared learning

SOLU

TIO

N

Remove HR responsibilities to do with case laws away from stores

Dedicated HR Hubs

Access to case law pages

CENTRALIZATION

CHALLENGES

• HR function was heavily burdened with administration, relying on manually intensive processes, with

difficulty producing useful management information

SOLUTION

• Streamline the range of HR activity

• Remove admin tasks that burdened the Store Managers

• Retail Training Specialists to design and deliver all training needs nationally

• Invest more heavily in HR technology - national People Policy service , telephony system

TRANSFORMING ADMINISTRATIVE PROCESSES THROUGH TECHNOLOGY

• Introduction of new business units to create them fully profit-

accountable

• Shift to a flatter organizational structure

• Increased employee empowerment and responsibility

ORGANIZATIONAL STRUCTURE

TRAINING AND DEVELOPMENT

• M&S recognised that you need the best leaders and managers to get

you through and out of the recession.

• During 2009 M&S spent more on leadership and management

training than previous years

• The retail training function focused on developing the skills that

would make the biggest difference in both the short and long term.

TRAINING AND DEVELOPMENT

TO SUPPORT THE BUSINESS STRATEGY

HR STRATEGY

• Equal Opportunities Policy

• all decisions relating to employment practices are objective

• Employ a workforce that reflects the diverse community they serve and maximizes personal and commercial opportunities

• Review changes in attitude and application of internal policy

• Raise staff awareness by designing and delivering training programmers that support the Equal Opportunities aims.

• Comply with the law and communicate to their stakeholders the responsibility to protect both individuals and the company.

• They also recognize that it may be necessary to make reasonable adjustments to ensure that disabled workers or applicants are not placed at a substantial disadvantage by a practice or policy that exists at M&S.

DIVERSITY

• Pay- review the basic pay every year• Employee discount • Holidays• Bonus• Pension• Life Assurance • Sharesave• Salary Sacrifice • Discounts• Health & Wellbeing • Charity Volunteer Day

REWARDS AND BENEFITS

Lifestyle Options

• Flexible working • Supporting working parents • Supporting careers • Supporting the community • Supporting you

LIFESTYLE OPTIONS

Employee Engagement

• According to the HR director of M&S Tanith Dodge, the company

emphasizes on four factors to engage its employees.

These four factors are:

1. Opportunity and Well-Being;

2. Pride in the company;

3. Trust and

4. Involvement Opportunity and Well Being

EMPLOYEE ENGAGEMENT

Employee Engagement

• Internal social media network Yammer helps bring workers together,

as well as congratulate them for hard work.

• Employee-of-the-month award

• Staff performance incentives

EMPLOYEE ENGAGEMENT

• Enhance life of our customers by providing high quality and innovative

products in the field of clothing, food and home products with a

special focus on making sustainable future

VALUE PROPOSITION

Value ChainCapability Sub-Capability Practices Metrics Gaps Addressed HR Strategy

SolidInfrastructure

Warehouse Construction

DistributionCenters

Retail Chains

Strategic Location Planning

Distance Travelled by Transport fleet

Procurement locations

Fuel costs

Areas not covered by retail outlets

Visibility gap

Increase in Procurement

options

Recruiting Operational

experts

Marketing Strategists

Capability Sub-Capability Practices Metrics Gaps Addressed HR Strategy

Logistics(Inbound & Outbound)

Inventory Management

Global & Local Sourcing

Channel Operations

Inventory locations placed close to

customers

Sourcing very close to the place of

origin

Wide range of order and delivery options

Demand-supply gap

Amount of potential customers in an

area

Transportation costs

Availability of material

Speed of delivery

Costs are reduced to a great extent

Increase in transportation fleet

Competitor speed is matched

Competencies to analyze gaps and

metrics (analytical ability)

Retention and Engagement

strategies for the fleet of drivers


Services

Customer Engagement

Internal efficiency

“SHOP YOUR WAY” model

(ordering online and in-store collection)

Staff Zoning (also included

increase in staff)

Percentage of sales through online portal

Increase in customer footfalls

Customer Satisfaction

Index

Lapsed/Potential

customers are brought within

the ambit

Help needed by customers is

always available

Effective hiring policies and

procedures to enable efficient

and prompt service (Training

Needs)


Marketing and Sales

Promoting exclusivity

Branding

Advertising

Bringing in the “English” flavor into

the promotion campaign (reliance on

the British brand)

Sub-brandingStrategy

“Your M&S” campaign (Core brand)

Traditional ads (Print, TV, etc.)

Market ResearchSurveys

Monthly/Annual sales figures

Cannibalization figures

Concentration on a single brand through various sub-brands

Brand Visibility

Rewards and recognition to the

sales and marketing teams to bring in the necessary amount of motivation (being the

central revenue generating exercise)

Perks for crossing minimum sales

numbersEngagement activities

to perk them up


Technology

Automation at various levels

Store Design

Auto-generation of order forms and delivery

details

Online Shopping

Ease and range of shopping is

increased

Order and delivery time

Customer satisfaction

Index

Store revenues

Time spent by customer in a

store

Competition from other e-

commerce giants

Decreased revenues and low interest

among consumers

Recognition of technical

competencies for the

recruitment of suitable

candidates to fill up these

positions of responsibility

GLOCALIZATION

• Organization should hire/ promote locals to help in designing the products

which better suit the market needs while still maintain the international

appeal.

• More people from the local geography should be added to the board of

directors of M&S per country.

• Acceptability of ideas by the employees

STRATEGIC RECOMMENDATION

RECOMMENDATIONS TO IMPROVE HR

1. Promote Plan A

2. E-learning/Training

3. E-HR

4. Talent management/Succession planning

• Predictive algorithms• Promote from within• Use competency based selection process for hiring• Use local talent to reduce mobility expenses

M&S.com• Advantage : penetration and presence• Challenge : price sensitive purchases

Right LocationsPremium products -> expensive -> not everyone can buy

Managing Compensation Expectation• Wafer-thin margins and scarce talent • Pay matters more than organization

Rewards and recognition• The retail sector in India is not considered as an important industry• high churn rate and low morale

M&S in INDIA

Strategies of Marks and Spencer

Recruiting & HR

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