RESEARCH PAPER – WAYS TO PROMOTE ORGANIZATIONAL SUCCESS
(Name of the Student)
(Professor’s Name)
(University)
(Date)
INTRODUCTION
Marks & Spencer is a company formed in late 1880s out of the joint venture of Michael Marks and Tom Spencer. The British retailer M&S was founded with strong values of fair trading and aspires to be most sustainable global retailer by 2015 in food, clothing, and financial services. Known for using the revolutionary measures, it keeps on aligning sustainability with core strategy in business and commits itself on engaging shared-values with stakeholders, and sustainable value-chains. This report focused on three sections. First presents a brief review of Marks and Spencer [M&S] background. Second section focuses on organizational business environment and strategic capabilities towards great business performance of the business. Final section provides the ways for organization’s strategic success in order for it to grow its position in local and global markets in the next coming years.
COMPANY BACKGROUND
Marks & Spencer [M&S], one of the United Kingdom’s premier retailing of food, clothing, and financial services, defines itself as the catalyst of change in British society by becoming the first classless retailer [Drucker 1994, p. 100]. Traced back the history, Michael Marks, a Russian born Polish refugee, openned the Penny Bazaar in Leeds in 1884 while using ‘Don’t ask the price, it’s a penny’ as slogan. Its enterprise amazingly grew and Marks decided to indulge into partnership with Tom Spencer, a late cashier from wholesale company IJ Dewhirst, in 1894 that the company was known take shape and build around five key principles of Quality, Value, Service, Innovation, and Trust [Marks & Spencer Company Archive 2012]. From its beginning up until the mid 1990s M&S had marked a leading market share on clothing industry by using resources and strategic capabilities to exploiting the differences with competitors and highlighted its competitive advantage to explore business in local place and potentials in foreign market. With 448 stores all over the United Kingdom, 202 stores franchised in 30 countries around the world, Marks & Spencer highlights the claims for integrating core competencies in trading as reality fit. It takes the initiative to come up with service and quality product that implements new eco (economic and environmental-friendly) standards to improve a greater number of products that its competitors produce like Levi’s, which focused on denim and cotton production [Lindsey 2011]. In 2007, Marks & Spencer launched ‘Plan A’ as a result of its desire to change and make a difference [Grayson 2011]. It is a long-term strategy that centers on climate change, waste, sustainable raw materials, health and being a fair trading partner, which the company claims will only succeed if it is ‘fully integrated into the way we do business’ [Jones, Wynn, Comfort, & Hillier 2007, p.248].”
BUSINESS ENVIRONMENT AND STRATEGIC CAPABILITIES
Drucker noted that Marks & Spencer defined its core competencies as the ability to identify, design, and develop the merchandise it sold, instead of the ability to buy [Drucker 1994, p.100]. With the huge development of fashion trends and changing demand of people, M&S core competencies have remained profitably growing, which in turn influenced business to inward focus and paid scant regard for the external environment, particularly the competitors and customers. It is noted that Marks & Spencer’s strategic capabilities include: empower the direct link with suppliers with design responsibility, brand management, excellent customer service, and excellent working conditions. Competition has eminently occupying business environment leading firm to carefully match market requirements and to enable a greater responsiveness to changes in wider business context extending into the theory of agility in supply chain philosophy [Christopher & Towill 2002]. Christopher and Towill [2007] note that this philosophy is summarized in six dimensions: marketing, production, design, organization, management, and people. Accordingly, agile supply chain with quality, cost, and lead time serves as market qualifiers; but with service level the operations make the market winners. In this view, Marks and Spencer has strategically used its strategic capabilities with dimensions of supply chain to design the framework of long-term implementations of sustainable development of retailing in customer relationship management, marketing, promotions, and inventory management. Even as competition and customer demands inevitably influenced the flow of operational procedures, Marks and Spencer still integrates strategic capabilities with enterprises in a mutual network through rapid information transfer and cost-effective exchange of activity [Christopher & Towill 2002; Tokatli, Wrigley, & Kizilgün 2008].
Brand Management. Several studies discussed that branding effect a high risk influence to product. Majority of the authors insisted that brands relationship to market projects a strong application of integrated marketing communication [Dauvergne & Lister 2012; Grayson 2011]. Over the last decades, Marks and Spencer has shifted from reactive approach to a more proactive integration of business strategy. Today, corporate branding of Marks & Spencer is defined with specific targets – reinforcing the credibility efforts and building stronger relationships with customers. This strategy, for example, includes employing sustainability experts to emphasize the importance of corporate leadership to measure consumer demands and product brands. Dauvergne and Lister argued that “the bigger the brand, the harder it is to control the reputation and, hence the greater the vulnerability” [2012, p. 3]. Further, Luck (2004) argued that if a brand is strong, customers take on the strong quality that brand possesses, which is important in allocation of market positioning. Simply put, as consumer exposure to brand increases, the quality or strength of a parent brand is expected to have a positive influence on retailer acceptance of a new extension product.
Customer service. Analyzing the economic and environmental relations of business with the lives of consumers, Marks & Spencer comes with the idea of ensuring a high-quality standard products and services. Due to the complexity of supply chains, because of outsourcing and globalization, Marks & Spencer structured and managed competitive advantage of products and services in greater differentiation between profit and loss. The manufacturing industry and business companies that bring products and services to the market should make end-users not only comfortable but make them as well as healthy. In practice M&S is continually optimizing its reputation of eco-label clothing. With the tag of ‘eco-label’ the company has distinguished their products with quality and efficiency significantly because these products have no harmful elements [Dauvergne & Lister 2012]. As per the lists of restricted substances that include, AZO-dyestuff, allergenic dyestuff, chromium VI, pentachlorophenol, organic compounds, formaldehyde and heavy, Marks and Spencer note the chemical selection with their partner manufacturing company as part of compliance and considerations to safeguarding their consumers.
Working conditions. Workers rights including child labor and women protection are watched over. That is, the consistency of Marks & Spencer in promoting quality products and services to the customers are followed by evaluation as to how the workers’ conditions are placed and treated, extending to appraisal of working environment and compensations. Grayson [2011] mentioned that Marks and Spencer continuing journey to embed corporate responsibility and sustainability includes the trust-based relationships with employees in establishing a corporate culture and environment where stakeholders mutually stimulate innovation and create long-term work-in-progress.
PERFORMANCE SINCE 2008
To meet the goals and ultimate objective – to become the world’s most sustainable retailer – Marks and Spencer defined 180 specific commitments to achieve by 2015 in its ‘Plan A’ corporate sustainability strategy. According to annual progress report in 2010/2011, the company has achieved 95 commitments, 77 are on plan, 7 are behind, and 1 is on-hold [Dauvergne & Lister 2012, p. 3]. The increasing development of Marks and Spencer in establishing potential strengths and opportunities, threats and weaknesses has triggered the company’s determination to achieve the commitment to sustainability. In this view, to broaden the understanding of competitive advantage of Marks and Spencer since the establishment of ‘Plan A’ the PEST [political, economic, social, and technological] analysis is used to provide a critical appraisal of the business performance of the company from 2008 up to the present. The dynamic and competitive environment of Marks and Spencer is looking forward to by local and foreign watcher. The PEST analysis measures a business market and potential according to external factors, such as political, economic, social, and technological, to help management successfully operate and present better measures in environmental influences and trends.
Political analysis. Jones et al., mentioned that “retailing is a large, diverse, and dynamic sector of the UK economy offering an ever-increasing range of goods and services to consumers” [2007, p. 246]. United Kingdom, among other states, has a stable political and economic setting. As Marks and Spencer primarily based in the UK, the business case is seen to focus on a wide range of potential benefits because serious threats to improve financial performance and profitability is quite hindered. Further, political position of M&S enables business to promote considerable concerns about working conditions, rates of remuneration, child labor, and health and safety issues. Leading in three sets of merchandise, the food, clothing, and financial services, the company recognizes the issue of ethical trading, sustainable sourcing, sourcing local and regional foodstuffs and animal welfare [Jones et al 2007, p. 250].
Economic Analysis. M&S achieved remarkable growth rates and market shares in scores of its business segments. In 1994, the company had 18% of the UK retail market, 33% of the women’s undergarment market, and 20% of the men’s suit market [Alon 2012, p. 50]. By 2004, Marks and Spencer’s market share has dropped to 11% from 0.2% of 2003, affecting the major segment of clothing products. M&S was then affected with the fight off of top leadership conflict. Handed with direct responsibilities for the implementation of ‘Plan A,’ directors led on piloting green factories and commit to have direct link with manufacturers / suppliers instead of doing business with wholesalers. Current fiscal situation in the UK makes favorable with low-to-moderate interest rates which indication of a healthy economy. In this view, Marks & Spencer needs to focus more in the fashion arena trending in younger age group that pays out most of disposable incomes on clothing.
Social Analysis. “Sustainable development is about ensuring a better quality of life for everyone, now and for generations to come. It means a more inclusive society in which the benefits of increased economic prosperity are widely share, with less pollution and less wasteful use of natural resources” [DETR, 1999, cited in Elliott, 1999, p. 238]. With the forces of changes get off to global community, M&S leaders recognized the key elements to sustainable development, and that is partnerships to customers and supplier to hinder threats post by increasing labor wages in UK and intense competition in the market. With several market forces competing to directly comply with consumers’ demand, high production process and high profits, Marks and Spencer’s social responsibility has mainly considered the integral element of business and corporate-level differentiation strategies (Williams, Siegel, and Wright 2005).
Technological Factors. As the growth comes on the heels of interactive motivation of technological innovations, Marks & Spencer recognizes the continuing pattern of development through technology. By initiating strategic internet sales system, internet networking based applications has become vital vehicle in evolving the rapid pace of people’s demand in distributing services of business particularly in retailing industries. Among the growth noted in M&S are the emergence of competition in the global market and the consistent aid of technology for the expansion of e-business. By developing powerful network through the website and information systems approach, M&S expanded sales in the world-wide market and optimized organization’s professional network with active interaction between prospect and existing clients, investors and suppliers. Furthermore, M&S adopts RFID or the radio frequency identification to handle the clothing items. According to Moon and Ngai, “the implementation of RFID meant that the in-store inventory could be tracked and recorded more effectively and responsively, ensuring that a fuller range of sizes or styles of garments was available to customers” [2008, p. 598]. The RFID is also expected to be significant in the various areas of the company like warehouse inventory, raw materials management, and logistics and return processing. The value of the technology is more realized as when considers the line-of-sight necessities of tags in the clothes, such as men’ suits, shirts, and ties at one of its stores.
POTENTIAL FUTURE STRATEGY
A huge company like the Marks and Spencer must be able to integrate effective and efficient enterprise resource planning systems. ERP systems will be deployed to aid in the collection, organization, production of reports and distribution of data or information within the business processes of the retail organization. This type of systems is also engaged in the alteration of data to be used by the managers of the retail giant in the crafting of business decisions. Intranet and extranet were deployed by the Marks and Spencer with the goal of improving the capability of the business organization in communicating with other stores in various parts of the world and aids in the sharing of information that make business processes easier, quicker and in huge amount or volume. The intranet system of the Marks and Spencer is expected to permit the firm to communicate about the operations of the several stores around the world. Marks and Spencer reinforced its intranet with another enterprise resource planning system through the introduction of various initiatives related to the strengthening of the core business, quality of products and the increased in the productive capacity of the entire workforce. At present, the firm is using the enterprise resource planning services of Oracle through the PeopleSoft HRMS [Reilly & Williams 2003]. This software is entailed in running and managing the financials of the company in various stores. To be specific, the PeopleSoft enterprise solution of Oracle was deployed by the company for functional and technological necessities. It has the capacity of modeling the framework as well as the processes of business of the firm in a graphical manner by using tools related to development and the compliance of the software to international standards [Tokatli, Wrigley, & Kizilgün 2008].
Compare to any typical business enterprise, it is critical for the Marks and Spencer to have knowledge about their market as well as with their customers and perform business processes that could aid in satisfying their ends. Hence, the Marks and Spencer needs to define what composes a new experience for the customer aside from the principles of the marketing mix. As such, the retail giant has outlined various programs to upgrade the manner of communicating with the customers. On the product development side, the company should attract huge number of people to its several retail outlets with the end goal of meeting their needs or ends.
REFERENCES
Alon, I 2012, Global Franchising Operations Management: Cases in International and Emerging Markets Operations, Upper Saddle River, NJ: FT Press.
Christopher, M & Towill, DR 2002, Developing Market Specific Supply Chain Strategies, International Journal of Logistics Management, Vol. 13, No. 1, p. 1-14.
Dauvergne, P & Lister, J 2012, Big brand sustainability: Governance prospects and environmental limits, Global Environmental Change, Vol. 22, No. 1, p. 36–45.
Drucker, PF 1994, The Theory of the Business, Harvard Business Review, p. 92-104.
Elliot, JA 1999, An introduction to sustainable development, London: Routledge.
Grayson, D 2011, Embedding corporate responsibility and sustainability: Marks & Spencer, Journal of Management Development, Vol. 30, No. 10, p.1017 – 1026.
Jones, P Wynn, M Comfort, D & Hillier, D 2007, Corporate Social Responsibility and UK Retailers, Issues In Social and Environmental Accounting (ISEA), Vol. 1, No. 2, p. 243-257.
Lindsey, J 2011, Dare To Wear: An Exploration of the Attitudes and Habits of the Consumer In Regards to Garment Care and Its Relationship and Effect On the Environment, Texas: Texas State University-San Marcos, University Honors Program.
Luck, EM 2004, Connecting brands with consumers on the internet, In: Proceedings of the 8th Education and Themes in Commercial Distribution Conference Series, 30 June – 2 July 2004, United Kingdom, London.
Marks & Spencer Company Archive 2012, M&S History: Beginnings. Retrieved 11 April 2012 from http://www.marksintime.marksandspencer.com/ms-history/timeline/.
Moon, KL & Ngai, EWT 2008, The adoption of RFID in fashion retailing: a business value-added framework, Industrial Management & Data Systems, Vol. 108, No. 5, p.596 – 612.
Reilly, PA & Williams, T 2003, How to Get Best Value from HR: The Shared Services Option, Burlington: Gower Publishing, Ltd.
Tokatli, N Wrigley, N & Kizilgün, O 2008, Shifting global supply networks and fast fashion: made in Turkey for Marks & Spencer, Global Networks, Vol. 8, No. 3, p. 261–280.
