Corporate Strategy : Examination Questions (Mark&Spencer) - Essay Example

Corporate Strategy Examination Questions Corporate Strategy: Examination Questions Marks and Spencer is a company which has been incredibly successful in their endeavors, however along the way they have in fact encountered a few crises and problems of sorts, and these issues are just as important if not even more important than all of the others, and are essential in any discussion of the company. In order to gain a more understanding and knowledgeable viewpoint on this company, there are several questions that must be asked, including: 1. What are the Key Issues Involved Here 2. Why are These Key Issues 3. What are the Particular Methods of Analysis 4. What are the Current Strategies Being Used by the Company 5. What are Some More Objective Key Issues 6. What Should be the Next Form of Strategic Direction By thoroughly answering and discussing these six questions, we can attain a clearly more acknowledged and critically important knowledge on this subject matter. The aim of this paper is to do this, as well as to discuss any and all other key related issues in this matter. This is what will be dissertated in the following. What are the Key Issues Involved Here The key issues that are discussed here are that of formulas for success, new tactics and the overcoming of specific difficulties, as well as other basic and essential facts in regards to Marks and Spencer, which is one of the most iconic chain stores in the UK, and is in fact the largest clothing retailer in the UK by turnover. Marks and Spencer (M&S) is also a multi-billion pound food retailer, and even has a third line of business which is selling home-based product such as linens, and in 1997 M&S was the first British retailer to ever make a profit before tax of over one billion pounds, and as of 2006, although the company did go through a crisis period, it is growing steadily again, and is rapidly regaining its immense profitability standard. M&S have over 400 stores located throughout the UK, which provide nearly 12.5 million square feet of selling space. Their largest store is at Marble Arch in London, and in addition, they have a consistently growing international business, with 192 stores managed under franchise in 30 territories, most of which are located in Europe, the Middle East, Asia and the Far East, as well as in the Republic of Ireland and Hong Kong. "International stores are mostly present in former British colonies and Eastern Europe; the attempt to expand into Western Europe and the United States failed due to their high prices and the particularly British version of the company. Why are These Key Issues The expansion into France was particularly unsuccessful, and eventually they were forced to close all their French stores." (Wikipedia, 2006). Furthermore, M&S expanded into Canada into 1973, and at one point even had a whopping 47 stores located all across the country. However, despite various efforts to improve its somewhat lacking image, the chain was in fact never able to move beyond its reputation in Canada as a stodgy retailer, and as well, the stores in Canada were smaller and did not carry the same varied selection. The issues that are discussed are key and highly relevant and significant in the text because they all are based around the reasons of M&S's success, as well as attempting to explain the reason for the crisis period, as well as how productive the company was in getting out of the dilemma. The product and market scenarios are all incredibly descriptive and highly significant to a company's profile, especially one such as M&S, which has had such immense profitable and marketable success, and who truly completed an endeavor, through falling into a crisis and using incredibly contextual and industrial-smart methods to regain their previous profitability. What are the Particular Methods of Analysis M&S's methods of analysis included many things, including the occurrence in 1998 when Greenbury announced that he would be stepping down. The reason this decision was so significant was because after Greenbury's announcement, there were a series of heavily publicized arguments that ensued, and these were primarily between Keith Oates, who was Greenbury's deputy, and Peter Salsbury, who was a senior director at M&S. "The in-fighting at M&S came to a conclusion when Greenbury returned to Britain after a sudden end to his holiday. He held a five-hour long meeting with the board and executive directors to determine who would be the successor. However, when put to the vote, Oates did not attend and elected to take early retirement." (Study Case of Marks and Spencer). Another industrial key issue was that of the process that Salsbury used to overcome the difficulties that M&S had been facing. With this process he had also been hoping and striving to regain confidence not only among the staff but for the company itself in all generality. His plans involved many issues and methods, including the establishing of a company-wide marketing department, in order to break down the power of the traditional buying fiefdoms. The company resulted in launching several new enterprises, one of which was a new clothing range, and the primary purpose of this was to restore its previous privileged image as an innovative retailer, one who offered unique and innovative products. M&S had always prided themselves on being one of the most notorious and available companies who supplied such a wide and diverse range of products and services, and they wanted this to continue being their primary point of existence. What are the Current Strategies Being Used by the Company M&S's current strategies can most definitely be considered as being appropriate in light of the methods of analysis that they had previously used, and generally made sense both in regards to marketing and productivity. M&S had many periods of time where their already present problems and obstructions were even further compounded by various dilemmas, and they continued to be consistent in their methods of problem solving and decision-making, which is a proper and reasonable explanation for why their success reemerged, even after a period of such crisis. M&S proved to be interested in making meaningful changes and were incredibly promising in the matter of tackling any and all problems that were at the company's core, rather than simply solving the most visible and subtle issues. There were certain and specific driving forces that were behind each one of M&S's products and product lines, and this was an incredibly crucial part of their success. What are Some More Objective Key Issues There are still a number of key issues that are obviously relevant and notable in M&S today, and although some are still the same as their previous experiences, there are some that have been altered or changed in ways, and some that are entirely new, some that are even obsolete. Although some believe that their initial marketing and sales success has not been regained as of yet, and perhaps never will be, their present success is concluded and considered in a different way. For example, M&S recently achieved what many commentators regarded as a coup, when they "poached Vittorio Radice with a 1.7 million pound package from the chief executive position at Selfridges to head its home furnishings division. Analysts and investors alike were impressed by M&S's new found ability to attract such widely renowned creative talent, feeling that it was a sure sign of its recovery, further commenting that its rivals should be worried." (Study Case of Marks and Spencer). What Should be the Next Form of Strategic Direction In regards to a strategic direction, analyzing around recommendations and suggestions on where the company of M&S should go next, what strategies they should use, and the methods of analysis that should be compromised and which should be continued; this is a matter of both complexity and significance. This matter is one which will decide and organize in regards to whether the company will continue to expand and raise its success level, or whether it will simply remain at the position it's at or perhaps even fall back into another crisis. The marketing and resources that M&S are incorporating into their system and business section should constantly be consulted and discussed thoroughly to the most prime extent, in order to maintain a constant neutral or positive position. For example, although the financial services consistently had strong brand recognition and trust among the customer base, it still remained as the most under-exploited part of M&S. At the point in time when M&S was most directly attempting to pull out all of the possible stops for its recovery, one of the most surprising tactics was when they formed an alliance with England captain, and then Manchester United star, David Beckham. What occurred here was that "M&S negotiated a three year children's wear deal with Beckham, seen as a natural hero and role model for boys, who would also reflect the company's brand values. The boys range was launched in September 2002, and exceeded all sales targets. By October the jubilation surrounding M&S continued as in poor performing market conditions it had achieved an increase in first half sales." (Study Case of Marks and Spencer). Overall, the transitions and vital business moves that M&S has made over the years have truly resulted generally in a positive way. The company has been unique, direct, and superb in their marketing skills and techniques, although several of their choices quite obviously did not result in the profit or success that they had expected. As with any company or business, there are usually always ups and downs, and M&S has proven that regardless of what crisis you may get yourself into, there are productive and positively strategic ways to help get yourself out of the trouble and back on your feet. M&S made its first reputation in the 20th century on a policy of only selling British-made goods, with its profit peaks occurring in 1997 and 1998. "At the time it was seen as a continuing success story, but with hindsight it is considered that during Sir Richard Greenbury's tenure as head of the company, profit margins were pushed to untenable levels, and the loyalty of its customers was seriously eroded. The rising cost of using British suppliers was also burden, as rival retailers increasingly imported their goods from low-cost countries, but M&S's belated switch to overseas suppliers determined a core part of its appeal to the public." (Wikipedia, 2006). As well, since the late 1990s, M&S has been consistently experiencing serious boardroom instability and as well, has made a number of different attempts to revive its business, of course to this has only been partial success. Perhaps regardless of what success they have now - or lack of it when compared to that of their previous heights of attainment - the various strategies and contexts that M&S both provided themselves with and involved themselves in are of the most crucial and significant factors. For it is these such factors that determine whether a company will be beneficial and prosperous, or depleted and unsuccessful. Read More