Strategic Analysis

Strategic Analysis of Marks & Spencer



Introduction

Marks and Spencer's (M&S) is a high profile British retail brand, operating through department and food stores which was established in 1884 in Leeds. Today the firm has a chain of 670 stores and operates in 40 countries globally, employing 77 864 staff. In 2009, revenue reached £12,876.3 million - 90% of this revenue was generated in the United Kingdom (Source of statistics: Yahoo Finance).

Industry reports suggest that the M&S' brand and its values is one of the main reasons behind the organization's success. It is considered a captive brand, selling its own products nationally, which are exclusive to the M&S stores. The offering of the brand has grown significantly over the past 20 years, from initially offering just food and clothing; it has stretched its brand portfolio to include homeware, finance and cosmetics. The M&S brand appears effective at being able to adapt to changing environmental conditions. The M&S brand is centered on the organizations core values; Quality, Value, Service, Innovation & Trust (Marks & Spencer, 2010). M&S is renowned for its white and green store fronts which are prominent on the British high street. The interior of the store is clean, well organized and simple. It is currently under the management of chief executive Stuart Rose who has previously managed Argos and Arcadia- he claims to have revived the M&S brand -whether he has done this successfully or not will be the focus of the report (Marks & Spencer, 2010).

Building a strong brand

After its revamping in the year 2000, M&S has focused extensively on building a strong brand based on its core competencies. For that purpose M&S had to be different from its competitors and it had to deliver differentiated value to its customers. M&S did extensive revamp work and came out with an improvised strategy that paid off rich dividends to then dwindling company.

Customer Analysis

The retail industry's success is largely determined by how much disposable income people have to spend - due to recent economic conditions the industry has been affected and hence competition has increased to fight for the pennies in the consumer's purse and the need to communicate brands value proposition to the customer has become ever more crucial.

As customers determine the success of a brand it is important that we understand them and who they are - it will also allow us to see if M&S are targeting the right segments. According to brand republic a large proportion of retail shopping is done by women who are in full time employment, either shopping for themselves and their partners and one in three women in the UK is said to wear an M&S bra (Lindsay,2009).

Competitor Analysis

Below is a diagram to illustrate some of M&S' major brand rivals and their offerings. As M&S have department stores in city centers, 'simply food' stores at train stations and various other outlets - they have a complex relationship with competitors, competing in various different sectors in the form of; Supermarkets, ...