MARKS & SPENCER

Marks & Spencer

Marks & Spencer

Company Background

Marks and Spencer (hereinafter called M&S) is one of UK's leading retailers of clothes, food, home products and financial services (Kippenberger 2007). M&S has a record of success and profitability since its establishment with well known reputation for its innovative, quality products and reasonable price which offers customers value for their money. M&S sales and services been declined in mid to late 1990s. The purpose of this report to identify the key drivers that made M&S falls in their performance. The external environment scanning is concerned with the forces and factors that impact upon M&S. However, analysing those forces and factors will assist M&S in identifying the change in the environment, is often referred to as the macro-environment, planning in how to cope with such a change, and being ahead of the competitors in the adaptation to the new environment and the response to the market demands.

Competitive Environment

Marks & Spencer is the latest UK retailer to turn to the web to revive its fortunes. M&S is now looking to its new marketing department to help revive its sales. It confirmed that part of its change programme means placing more decisions with the marketing team. M&S has confirmed that its pre-tax profits collapsed to 546 million for the year ending March 1999, compared with the £1.2 billion pre-tax profits it made in the previous year.

The retailer also confirmed that its share of its core market of clothing and footwear was down from 15.1% last year to 14.3%.

Spark out

Salsbury blamed the results on stronger competition in the retail sector in recent years, admitting that: 'We lost touch with our customers and forgot about the competition. Those are quite fundamental for a retailer.' He has swiftly cut costs. He is pushing decision-making down to the shop level and prying open the group's inward-looking culture: 'I would be disappointed if customers would not see a difference in a year's time.'

M&S customers criticised the winter range for being too dull and dowdy, and opinions are split over the desirability of its current spring and summer clothing. Mr Salsbury assigns much of the blame to M&S's powerful buying teams, who stock what they think people will like rather than listening to the store managers who actually meet customers. So he is devolving power away from buyers. He has also started to source more from overseas, to reduce costs and improve flexibility - vital now that cut-price rivals such as Zara and Gap are spreading along Britain's high streets. The company may even drop its tradition of selling only its own brand, and slip in some designer names - it already uses British designers such as Paul Smith, although their labels are nowhere to be seen.

M&S has launched the first advertising campaign in its history, employed branding consultants, set up a marketing department and is about to appoint its first marketing director - rumoured, encouragingly, to be a heavy-hitting outsider. In a statement, M&S said that the creation of the marketing ...