Marks & spencer international strategy

Marks & spencer international strategy

Marks & spencer international strategy

Introduction

“M&S has been widely recognized as one of the best-managed companies in Europe”. This statement from shows the excellent reputation, M&S once enjoyed. Today, however, people frequently associate the term “failure” to this company. This essay is to examine the origins of M&S's success and show the basis of their competitive advantage. The question why they suffered the downturn in performance in the late 2000 and beyaond arose is to be answered and their competitive strategy analysed. Afterwards the change in initiatives mounted since the departure of Richard Greenbury, a former chief executive officer of M&S's, will be evaluated and the main problems of the start of the 2000s described.

M&S had three major concerns about the management. Those were “Quality”, “Value for Money” and “Human Relations”. So they managed to establish a reputation for high reliability and good quality at a reasonable price. Furthermore M&S were renowned for the way they treated their staff. Staff was employed only after certain special criteria had been met. Not only high salaries but also a variety of services offered to M&S employees contributed to a real family atmosphere. This company culture was absolutely unique. From the three general concerns M&S developed a number of principles they sought to follow. All in all it can be said that M&S focused on the costumers and understood and responded to their demands. They thus created a solid external costumer image. . Michael Porter's five forces help understanding of the competitive advantage M&S had. When it comes to the threat of entry, one of the most important strengths can be seen. M&S was simply unique in its nature. Copied from concepts Simon Marks, the son of Michael Marks, observed in the United States, M&S were the first ones to sell a variety of products from different fields under one roof (Collier published in Johnson et al., 2006, 123-54, 123-54). This differentiation connected with the reliability and quality the company was famous for, probably deterred potential competitors from entering the market.

Explanation Concerning the bargaining power of the costumers, it can be said that although there were competitors for the individual products M&S's costumers trusted on the brand St Michael. M&S's service was also unique. Their refund policy allowed customers to bring back items they were not happy with without mentioning a reason. The bargaining power of the suppliers was of equal importance. Up to 90% of the suppliers were British, and British products were perceived to be high quality products. M&S chose their suppliers carefully and in the case of delays or inferior quality they ended the cooperation immediately. The suppliers were to work exclusively for M&S, which on the one hand was a very important deal for the individual supplier and on the other hand sets M&S in a very powerful position (Collier published in Johnson et al., 2006, 123-54). M&S were not free of a threat of substitutes; however ...