Development Program of Marks&Spencer - Term Paper Example

Marks & Spencer - Business Case Management Report Introduction: "Unique organizational operational activities of a non repetitive nature, occurring only once, within a specified time frame are known a 'Projects.'."(Roberta S. Russell and Bernard W. Taylor 2003) Managing such projects involves the development and implementation of an innovation or change in an existing operation. Thus project management encompasses planning the project and controlling the project activities, subject to resources and budget constraints, to keep the project on schedule. The nature of the global business environment is such that new machinery and equipment as well as changes in the existing locations are constantly evolving. Project Management is the art of directing and coordinating human and material resources throughout the life of a project by using modern management techniques to achieve predetermined objectives of scope, cost, time and quality and participation satisfaction. Deciding Factors: In order to meet the organizational objective of providing increased satisfaction to the customers by offering products of superior quality and an efficient service in more attractive surroundings that are comfortable to the customers a continuous stores development programme on the part of Marks & Spencer is the most important factor to decide on the expansion and modernization of their stores locations. Apart from the customer satisfaction from the commercial angle also when there is an opportunity for increased profitability resulting from such relocation the company would as well take it up to get the advantage. In the instant case the new location Kendal being a busy market town as well as a popular tourist area in Cumbria offered excellent prospects of increased sales activity. Existing sales performances, proposed selling space available, local customer profile, size of the catchment of the population and local competition are some of the other deciding factors that will influence the decision about the project. Major Obstacles: The major obstacle was the climatic factor as the new location Kendal was getting more rains that may obstruct the flow of work to a great extent. It was also necessary that the whole project of locating in the new site was to be kept secretive so that the staff of the existing outlet 'fine food' which was being taken over by Marks & Spencer is not upset. The initial preparation of the site by the contractor may also pose an issue though not a major one. It was necessary to get all the statutory clearances by giving notices abiding by the requirements of public notice periods so that if there are any objections from the public. Another issue in the way of the progress of the project was the important building regulations approval required was for the changes in the elevation involving design changes and relocation of entrances. One of the major obstacles faced was in the issue of the opening dates so that the sales during the festive season were not missed. However the project team did not want to rush up and end in doing wrong things. Discussion and Evaluation: As outlined earlier the organizational objective of Marks & Spencer in improving customer satisfaction and thereby achieving enhanced profitability was aimed to be achieved through this relocation project. The major deciding factor in favour of the project is the location of the new site which is a business town as well as a tourist spot which offers a twin advantage for improving the sales of the company. Moreover the geographical location also went in favour of the decision to relocate. As explained by the Stores Planner the customer satisfaction can be improved not only by offering quality products to the customers but also by providing an attractive and comfortable stores environment. When both these factors are combined in any retail store relocation, the project is bound to result a remarkable success. Moreover efficient stores design also result in an effective cost minimisation. A lot of inputs in the form of studying the existing sales potential and the possibilities of improving upon them; the local customer profile and their product preferences; the selling space available in the proposed new location and a proper allocation of the floor space for the different departments; and a compete study of the competition from the existing vendors and the impact of such competition in the proposed sales target of the company went in to the decision to go on with the project of relocation of the stores. The evaluation of the project would have been made essentially on weighing all these factors which have a direct bearing on the profitability from the proposed venture. Preparation of detailed plans and layouts exhibiting the cost implications for the various project requirements was to be presented to the project board for evaluation of the project and the eventual approval. The design of the internal sales floor plan is yet another factor that needs to be closely looked into before any decision is taken in this respect. The floor space available should be adequate so that all the departments get the required space for the maximization of sales in their respective merchandise. Getting the necessary permissions and approvals was also another important factor that could determine the speed with which the project could be completed. Since there were changes in the designs and relocation of entrances it was necessary to get the building regulation approval before the work could commence. Public notices complying with statutory periods were to be taken care of before the project commenced. Conclusion: The diversity of new products and product markets and the desire to serve the customers with enhance shopping comfort and product superiority made the initiation of this project by Marks & Spencer. It is an ever present and pervasive compulsion in the history of the company to venture into new projects for increasing the customer and satisfaction. As a result there is a definitively increasing trend that a larger proportion of organizational efforts are being directed towards such project oriented activities. Consequently planning and managing projects have taken a crucial role in the overall management of the company. Discussion Document Based on the study of the relocation project of Marks & Spencer the following are some of the important factors that are associated with the undertaking and execution of any retail project: Customer Need and Expectations: "Multi-channel retailing almost looks like a no-win proposition for the retailer". (Yantra Corporation) In a multi product retail environment it is important the customer must be serviced from the time they enter the store till they complete the purchase. Further the customers of today bring along with them a high expectation of shopping experience. Even a very loyal customer may decide to go with the competitor in case of a stock-out or slow check out. In order to meet the need and expectations of the customer the store should be customer-centric. To be customer-centric involves: "The organization and the store are built from the customer perspective in, not the retailer perspective out. The shopping process is easy to understand, and customers have more control over the entire retail experience. Customer information is appropriately used, by both the retailer and by customers, to enhance the shopping experience. The shopping experience is tailored to different customer needs and shopping occasions." (IBM Corporation) In the case of the proposed project of relocation of the Marks & Spencer the above clearly categorises the thrust areas for the project team to work on. Feasibility Research: A feasibility research can ascertain the feasibility of a project by studying the various factors that may determine the project's success. The scope of the feasibility research may depend upon the project on hand. However at the minimum the following elements need to be studied: Marketing plan: There should be a strategic marketing plan that outlines the proposed project goals and the ways in which these goals will be met. Financial Review: Detailing estimated costs and revenues with respect to start up as well as the operating costs of the project Resources: A study into the availability of the required financial, human and technological resources to carry out the proposed project activity. Timing: It is to be ensured that the proposed activity will fit into the time frame within which the project is to be completed. The Project Board of Marks & Spencer would have taken in to account all the above parameters before deciding on the investment in the proposed relocation. Capital Evaluation: "A project is an investment activity where we expend capital resources to create a producing asset from which we can expect to realize benefits over an extended period of time." Hence it becomes important to evaluate the project in terms of the expected returns on the capital proposed to be invested in the various assets relating to the project involved. There are various criteria and methods available for the evaluation of the capital proposed to be invested. Some mathematical models have also been developed over the period to calculate precisely the potential returns from any capital investment in project. Payback period, Simple Rate of Return, Net Present Value method and Internal Rate of Return are some of the methods that are traditionally used to evaluate the capital investment in the projects. (Dr.A.K.Sarma) The Feasibility report submitted to the management of Marks & Spencer would naturally point out the projected return on the investment in the relocation project so that taking the decision would be easier for the management. Budget: A budget represents a list of all planned income and expenditure that an organization can expect to happen. The budget can also be considered as a financial plan for any future period. "Simply stated, a budget is a quantified, planned course of action over a definitive time period. It is an attempt to estimate inputs and the costs of inputs along with associated outputs and revenues from outputs. Creating a budget is important because it: Forces an organization to carefully consider the expected demand for its products and services and the resources required to meet that demand Translates the organization's higher priorities into the appropriate resources required to achieve those priorities Highlights potential problems in sufficient time to take corrective actions Creates a baseline against which actual results can be compared." (Icenter) Budgets can be prepared for capital expenditures on a project as well as for planned revenue expenditures covering a period. There are three definite sources which will provide the basic information needed for creating a budget. They are plans, past performance and the people connected with the activities. On approval of the project for Marks & Spencer there is the need to prepare detailed capital expenditure budget and operating budgets showing the financial implications of the project. The Planning Process: In any project promotion the planning of the process is a key element for the successful completion of the project. "Planning is setting the direction for something -- some system -- and then guiding the system to follow the direction." There are various kinds of planning that may be required to be undertaken by an organization. The planning process involves putting the right people in the project, communicating with them effectively, building in accountability for the chosen people for the project, periodical evaluation of the process of planning, documenting the planning information and review of the process and analysing the reasons for deviation if any from the planned process. (Carter Mcnamara) The successful completion of the relocation project for Marks & Spencer depend entirely on the effective planning of the process of the development of the project. Progress Evaluation: "The purpose of a Progress Evaluation is to assess progress in meeting the project's goals." (Action & Research Web) Progress evaluation involves collection of information to learn whether the standards and milestones set for the progress of the project are being achieved. The following pertinent question about the progress of the project may bring out the progress made in the evaluation of the progress. Whether the people associated with the project are moving in the direction of attaining the goals established What are the obstacles the participants face in progressing further in the project The above questions would bring out the factors that aid or hinder the progress of the project of relocation by Marks & Spencer so that the project manager can take suitable corrective action. References: Action & Research Web 'Progress Evaluation' University of Sydney http://www2.fhs.usyd.edu.au/arow/o/m06/progress.htm Accessed on 30th August 2007 Carter Mcnamara 'Basic Guidelines for Successful Planning Process' Free Management Library http://www.managementhelp.org/plan_dec/gen_plan/gen_plan.htm Accessed on 30th August 2007 Dr.A;K.Sarma 'Methods/Criteria of Project Evaluation or Measures of project Worth of Investment' http://assamagribusiness.nic.in/agriclinics/Methods%20criteria.pdf Accessed on 30th August 2007 IBM Corporation 'The Customer-Centric Store: Delivering the Total Retail Experience' http://techfinder.businessweek.com/businessweek/search/viewabstract/85717/index.jsp Accessed on 30th August 2007 Icenter 'What is a budget' http://www.defenselink.mil/comptroller/icenter/budget/whatisbudg.htm Accessed on 30th August 2007 Roberta S.Russell, Bernard W.Taylor (2003) Operations Management V edition Prentice hall Yantra Corporation 'Satisfying Customer Expectations: Succeeding in the Multi-Channel Retail World http://www.yantra.com/downloads/whitepapers/Succeeding_Multi-Channel_Retail_World.pdf Accessed on 30th August 2007 Appendix 1 NETWORK ANALYSIS DIAGRAM 1 (2) 2(4) 1(2) 3(6) 4 (2) 4(2) 5(12) 6(2) 7(1) 8( 5) 6 (2) 6(2) 7(1) 9(5) 11(7) 10 (4) 13(7) 12(4) 14 (4) Gantt Chart Task Preceding task Duration weeks Completion week 1 0 2 2 2 1 4 6 3 2 6 12 4 1,3 2 14 5 4 12 16 6 4 2 16 7 6 1 17 8 7 5 22 9 5,8 5 27 10 7 4 21 11 6 7 23 12 11 4 27 13 6 9 25 14 9,10,12,13 4 31 Read More