Marks And Spencer Jobs Cuts

Marks And Spencer Jobs Cuts



Marks And Spencer Jobs Cuts

Financial Services

M & S have provided financial services since 1985 (marksandspencers.com). Although this section has performed well recently, it may have missed opportunities earlier due to the fact that they were reluctant to embrace the internet. Tesco for instance, who partnered with the Royal Bank of Scotland, have developed an outstanding online presence and now M & S are playing catch up to them.

Home-wares

M & S could not understand why 'customers who purchased its food or underwear might not necessarily want to buy products from its home furnishing range' (Document A, p.1047). Also the addition of companies like IKEA to the market in 1987, who made a huge impact through marketing their low-cost solutions to customers through mass media, led to M & S home-wares sector never really taking off.

M & S again had failed to see their competitors coming at them. This could be a case of 'having their fingers in too many pies'. M & S seem to want to get into every market possible and think that because they have huge financial backing they can conquer them all. With the management structure being based on that which originated before the First World War they most certainly wont.

International

M & S had embarked upon a huge expansion programme which took them into Europe, America, Canada and Hong Kong. This was set at well over £2 billion (Document A, p.1049). It is amazing to think that they poured so much money into this expansion programme considering the amount of money they had already lost overseas. For instance, their Canadian store had operated at a loss for 24 out of the 25 years it had been running. They did not have any experience in these foreign markets and so when they tried to impose their culture onto a foreign workforce and customer, it just didn't fit. M & S was a well known brand name in the UK, but overseas it wasn't known at all. This meant that M & S had not carefully planned their assault onto a foreign market but again thought that throwing enough money into the venture would be enough.

2. Generic Strategies

The concept of competitive strategies is clearly developed by Porter (1980) and has become an accepted approach for analysing the manner in which firms within an industry compete to seek a competitive advantage. Porter identified three generic strategies that a firm can use to develop and maintain a competitive advantage: cost-leadership, differentiation and focus.

Decline in profits cause concern

In November 1998, M & S reported a "23 per cent decline in first half profits" (Document A). Richard Greenbury blamed this on competitors eating into their market share from the top and bottom. However 'blamed' is the wrong phrase to use here as their competitors should be 'accredited' and it is M & S who should be blamed for they were the ones who were stuck in the ...