Business Objectives
Marks and Spencer’s mission statement as stated in its corporate website can be broken into 3 parts which include:
Vision - To be the standard against which others are measured
Mission - To make aspirational quality accessible to all and
Values - Quality value, service, innovation and trust.
Their main objectives include the following:
Profit maximisation: This is often the main aim of the private sector business and so it can be said that Marks and Spencer are aiming to gain as much profit as possible. In the UK retail of Marks and Spencer the turnover and operating profit according to the FTSE 100 Index, last year was £821.0 million, this year was £506.8 million. So at the moment Marks and Spencer UK retail business clearly isn’t successfully profit maximising, however the current economic climate and the recession can be held liable and account for the blame. This can be achieved where the difference between the total.
Market leadership: Marks and Spencer already have a very large proportion of market share, as mentioned in the beginning they are within the top six leading retailers. As of 2008, Marks and Spencer became the 43rd largest retailer in the world, however this objective still remains, it has started expanding into other ranges such as homewares, furniture and technology. In addition to that, plans for a new executive chairman Marc Bolland (formerly from Morrison) to take over so to became market leader in the expanding segments still remains.
Offering high quality service: As long as Marks and Spencer are in operation so will the objective for providing high quality service. Marks and Spencer are well known for their quality. They claim that no one cares more about quality it is said in their annual review report.
Growth/Diversification: Like for all businesses, growth is an important objective of Marks and Spencer. Business critics argue that the firm must grow in order to survive; failure to grow might result in a loss of competitiveness. Marks and Spencer own 885 stores in more than 40 territories around the world, over 600 domestic and 285 international. If Marks and Spencer are able to grow, they could dominate their expanding markets, and probably take it into using it to enjoy some monopoly power and raise its price. If they do so successfully the benefits of economies of scale can be used to full advantage.
Regarding the strategic objectives, sales have been falling especially with the arrival of store such as Primark. Former chairman and chief executive Luc Vandevelde announced in 2001, “Its objectives will not surprise you. We wanted to return Marks & Spencer to its former position as the standard against which others are measured. We want M&S to be famous once again for its quality, value, service and innovation, drawing on strengths which still exist but which may have been overlooked. We want to inspire trust in our customers, and we want to reward you, our shareholders, for loyally standing by us.” Marks and Spencer are still currently working on this plan taken form the corporate website, they have spent the last five years working on their long term plan, they are now “With a strong brand, the right products and an experienced management team, we are now:
- Increasing the pace of change and operational execution in the business;
- Leveraging M&S Direct by building more channels to market;
- Building our international portfolio to grow our global customer base; and
- Reinvigorating our brand communications. “
External and Internal Factors
Both external and internal issues influence how the company decides to operate. The external issues will, of course remain the same for all the players in the market.
With regard to Marks & Spencer, the main stakeholders can be summarised as the shareholders, customers, employees, government, local community, and suppliers. They each influence the business decisions in different ways. Here are some of the major influences the different stakeholders have on the business.
Internal:
Poor management, failure to recognise and react to changing market trends. Stakeholders involved in this are the employees, especially the marketing sector. If they kept in touch with their market, they probably would have been able to see a drop in demand, e.g. through questionnaires in which their target market regularly shop. If they had established this before hand, they would have been able to adapt to the change better.
Decentralised marketing function, inconsistent brand image. Again the employees come into play here, one on the production side, quality has reduced. Consequently, this had a knock on effect on brand image. If the employees from, marketing should have picked this up and maybe consult the research and development sector to add value to product or change production line. Another stakeholder involved here is the customer, even though brand image may have downgraded, brand loyalty should have been there to cancel out the effect.
External:
Fast changing market and consumer change in taste. Here, customers and their taste influence this. Now for the company to keep up, research and development as well as marketing should come in to adapt to the changes.
Currency – imports/exports. Influences here are from the government e.g. with factors such as tax, higher the tax the more costly the imports etc. The suppliers also come into this, UK clothing manufacturers are very rare and quite costly so Marks and Spencer are importing their material, currency and all will defiantly influence decisions
Increased competition locally and from foreign companies. The local community is the main stakeholder here, especially has Marks and Spencer are falling behind in keeping up with the new trends, if competitors are of course Marks and Spencer are going to loose sales.
(Taken from http://www.businessteacher.org.uk/)
Conclusion and Recommendations
The downturn for Marks and Spencer was that they did not respond quickly enough to the changing taste and preferences of their consumers, and the have acknowledged this. For instance the clothing sector of the company especially the womanswear, they suffered from a lack of originality and did not reflect the modern taste for a more casual look. Same goes for the food section, although they remained in their market position, sales were less significant as result competitors are quickly catching up. Future recommendations, will be to expand target audience e.g. innovate to young adults as well as women, this will spread risk and provide a safety net if women clothing fail again. One other thing is to as mentioned earlier to expand on the technological and furniture side of the business, this also spreads risks, but will gain market share and allow Marks and Spencer to become an even more powerful leader. Not only that in doing that brand image might be restored not only in the clothing department but also on the technological and furniture department proving an even stronger brand image and securing that brand loyalty.
References
Books
Company Profile, (2004), Marks and Spencer Group Plc, UK: Data Monitor
Internet sources
A Report on the Business of Marks and Spencer." 123HelpMe.com. 01 Dec 2009
<http://www.123HelpMe.com/view.asp?id=149330>.
http://www.examstutor.com/business/resources/companyprofiles/marksandspencer/strategyinsight.php
http://corporate.marksandspencer.com/aboutus/company_overview
http://www.businessteacher.org.uk/
