The Modern Management of Marks and Spencer - Case Study Example

SUCCESS OF A SUPERMARKET BEING EFFCETIVE OPERATION College/ TABLE OF CONTENTS Introduction ……………………………………………….. 3 Marks and Spencer: Market Overview…………………….. 3 Effective Operation in Marks and Spencer……………….... 4 Effective Workforce………………………………………... 5 Motivating Employees at M&S……………………………. 7 ‘Quality’ within the M&S………………………………….. 8 Customer Satisfaction Measures within M&S……………... 9 Conclusion………………………………………………….. 11 References………………………………………………….. 12 Bibliography……………………………………………….. 13 Introduction In a fierce competitive market environment, recruiting effective workforce, employee motivation, quality measures and customer satisfaction play vital role in determining the success of a business regardless of retailer, wholesaler or manufacturing companies. These are assets of a business as it provides increased profitability and are highly important in enhancing competitive advantages. The modern management concept in which customer is placed in the centre of the whole business processes, activities and culture has been widely accepted by almost all corporate management systems. This work provides a case analysis on Marks and Spencer in regard to its success in the UK grocery market through its effective operations in terms of business performance, effectual workforce, quality services and customer satisfaction. It observes how a supermarket can bring better outcomes if it manages operation, workforce, quality and ‘customer satisfaction’ in a more effective way. Marks and Spencer: Market Overview Marks and Spencer is a strong brand name in the growing UK grocery market operating through over 620 stores and employing more than 75,000 employees throughout UK. It is the 43rd largest supermarket in the world and it operates in more than 30 countries around the world. It sells both clothing and food items, and recently expanded its business in to other ranges like home wares and furniture. It has become the largest retailer offering stylish, high quality, outstanding value clothing and home products. With a mission to offer the customers high quality, great value clothes, food and home products Marks and Spencer could increase its turnover and become largest clothing retailer with a market share of 11.1% (M&S, 2007). Clothing accounts to be 44.8 % and food accounts to be 49.8% of the total sales of Marks and Spencer. Marks and Spencer has achieved great success in the last few years and now it is in the progress by focusing on core business and it aims at becoming more customer oriented and flexible business through offering wide selection of quality goods. Fig- 1 UK grocery market has become more intense in last few years and Tesco continues to hold the leading share of 27.6% over all of its competitors operating more than 2000 stores only in UK. Marks and Spencer has remained far potent and forceful through its customer-driven approaches. Effective Operation in Marks and Spencer UK’s grocery market has recently been characterized by intense competition and customers are well aware of that from which grocery store and how should they buy things. This made changes in almost all retailers’ strategic planning towards recruitment and employee performance. Therefore, large groceries like Marks and Spencer took extreme attention in offering training to the employees, incentives and motivation, quality in products and services and customer satisfaction that helped them to compete in the marketplace. Fig- 2 Fig- 2 shows the combination of the effective workforce, motivation, quality and customer satisfaction that helped Marks and Spencer achieve its success. Effective Workforce The traditional tools of human recourse management including recruiting and selection, formal training, recognition, reward systems and career training offer many opportunities to support developing effective marketing techniques. Employee involvement is crucial in the modern changing business culture. Marks and Spencer gave enough emphasis and spent more on recruitment and training processes in order to make employees cope with the ever changing marketing culture. According to Andrew Seth (2001), the recruitment, selection and training processes conducted by Marks and Spencer have been at the leading edge of contemporary practices (p. 125). The basic principle of M&S in recruiting its workforce is getting the right talent in the right place at the right time. An effective customer service occurs only when there are enough qualified staffs who meet customers’ needs. According to M&S 2007 annual report “getting the right number of people with the right skills on the sales floor at the right time is the key” (p. 21). M&S has found that customer-facing employees play crucial role in improving the productivity per employee as it directly reflects the customer satisfaction and quality of services provided. Finding right skills especially for sales area has been increasing the productivity of the firm for last few years. Out of more than 75,000 employees working in Marks and Spencer, 69,309 workers have been appointed throughout UK stores. During 2007, when M&S appointed a good proportion of employees throughout its UK stores with the intention of increasing ‘customer- facing’ employees, it noticed that the number of individual items sold per full-time members of staffs in clothing and home goods increased by 12.2%. The employees of Marks and Spencer have been given extra responsibility and accountability throughout its stores. Gill Kirton (2000) emphasizes that HRM policies in many organizations ignore the wider social structures and systems that perpetuate disadvantages in the labour market. The gendered, aged, sexualized and racialized roles within the labour market reflect segregated roles in wider societies and thus the management may not benefit better out of it (p. 217). Marks and Spencer is an illuminating example where employees are recruited without these sorts of social or otherwise discriminations. Gill Kirton (2000) provides M&S, especially from the experiences of Diane Thomas who was a sales assistant in one of M&S stores, as an exceptional example for applying equal opportunity while recruiting and also in the workplace. The basic key was to raise awareness among the employees regarding equal opportunities. Many of Blacks thought that Marks and Spencer may not be a place for nice working environment (p. 223). With a strategic vision to expand the employee strength in the business, M&S recruits and trains the managers on three different grounds. Trainee managers with Advanced levels who undertake 24 months of training Graduates who are directly appointed through universities undertake 12 months of training Experienced managers with retail experience undertake up to 3 moths training. This recruitment and training process have great impact on increasing the efficiency per employee and thus increases the productivity. (The times, 2009) Motivating Employees at M&S No matter the size, firms around the world face a crisis in fostering efficiency and motivating the workers in the work place. Motivating employees is an asset has been widely accepted by management. Motivated workers tend to be more efficient as there would be healthy cooperating between management and employees. Training the workers on the job has been considered to be an effective way of motivating the employees. Marks and Spencer emphasized on the job training processes so that the section management will responsibility for inspiring and motivating the team. While an employee first gets in to an idea that what it would be well to work in, it would result in motivating him towards achieving the specified goal. Marks and Spencer employees are able to enjoy the workplace as they have skills to do what they are expected to perform and also because of that on the job training offers practical learning. At Marks and Spencer, on the job training is the way for performance coaching. Marks and Spencer provides the facility of intranet that all the workers are able to access and find enough materials, documents and all other company information that in turn help them become aware of the working environment (The times, 2009) As part of the strategy, M&S depends upon the skills and experience of motivated employees and thus it offers different levels of remuneration packages to the employees in order to attract, motivate, and retain high caliber individuals in the company. The level of remuneration and benefits that offered by M&S to its workers is the key to supporting the corporate objective and maintaining its market position as an employer of choice (M&S annual report- 2005). Remuneration for executives and management staffs include base pay, variable pay, pension and other benefits that are designed to motivate its staffs. ‘Quality’ within the M&S Providing quality goods and quality services determine the effectiveness of the business performance. In the strong competitive UK grocery market, customers rank retailers in mind on the grounds of premium quality goods and services offered to them. Unless ‘quality’ played its role, the whole efforts can go worthless because customers won’t be satisfied and thus they cannot be retained by the retailer. According to Peter Ferdinand Drucker (2007), Marks and Spencer had tackled the area of innovation objectives in the very early 1980s and it rapidly had built its quality control laboratories in to research, design and development centers (p. 97). As a part of the most serious efforts to maintain quality standards, Marks and Spencer, after World War II, had set p a design studio with competent designers and helping technicians establish fabric and manufacturing specifications (Stanley Marcus, 2001, P. 26). The M&S philosophy of quality can be observed from its decision to offer customers a choice of high quality products at prices that suit them. For M&S, value = price x quality (Annual Report, 2007). Offering high quality goods at the lowest possible prices shows the value of ‘quality’ in M&S. Marks and Spencer’s service quality can be observed from the fact that its stores in UK are highly advanced and are established in such a way that it can offer most convenient shopping to the customers. Primary and secondary facilities including vehicles parking and restaurants are available at its most stores. Most of the Marks and Spencer stores in UK have entrance cameras that record the number of people who visit the stores and establish the ratios between the visits numbers and sales. Marks and Spencer has recently introduced thermal image cameras in its stores that are more sensitive in picking up flow of individuals and groups of people while they walk in to the stores. In order to assess and evaluate the quality of services provided to the customers, it has recently started ‘mystery shopping’ as a strategy so that experts will anonymously visit its stores once in a month, biggest shops will be visited twice a month and in total around 6500 visits per year. There were greater improvements after ‘mystery shopping’ has been introduced that the overall scores showed steady improvement during 2007, showing an increase of 70% in May. Customer Satisfaction Measures within M&S For many years, corporate strategies focused their efforts mainly on reducing expenses and maximising the profits. But, recently the whole business strategy has been changed and customer has been placed in the centre of the business processes. According to Bryan Foss (2001), many companies have increased their information including customers’ profile, specifications and features they like and responds towards goods and services offered. These information have been widely used by management to determine market changes, customer preferences and services that are required by customers (p. 3). Customer satisfaction and maintaining good relation with customers have been key elements of Marks and Spencer in order to gain the benefits for the competitive environments. Marks and Spencer’s decision to listen to its customers through regular visits, focus groups and other research systems will help them plan new products and services required by customers (M&S annual report, 2006, p. 7). During 2006, Marks and Spencer responded to its customers with ‘Look behind the label’ in order to make customers better understand its approach to the increasing environmental and ethical issues. This can be considered to be a better example for maintaining good relations with customers. Marks and Spencer trained and appointed 1500 assistants to give its customers advice on nutrition and it continued to expand the programs of ‘Eat Well’. M&S always attempted to be a right channel for providing right information to the customers regarding food products, services, quality and other business related issues. According to Dennis Lock (1998) Marks and Spencer has been often seen as a model for customer services and retail management by consumers and managers (p. 428). Marks and Spencer’s ‘mellow yellow’ advertising campaign shows its commitment towards using only free range eggs in all of its retail stores. Its program ‘true colours’ signifies how its food products are 100% free from artificial colours and flavourings (M&S annual report, 2008). Markets are becoming highly customer oriented and customers are turning to be health, hygiene and ethical concerned. Marks and Spencer takes it seriously and it has been a long time plans to achieve ‘100 % free from artificial colours and flavours’. By April 2008, Marks and Spencer became the first retailer to remove all artificial colours from its entire food and soft drink ranges. It was a long as three years journey for M&S to become ‘free of colours and flavours’ from over 900 products. The business processes at M&S including mystery shopping, quality measures, responding to customers views and opinions, communicating well with customers, ‘Eat Well’, ‘Mellow Yellow’ and ‘100 % colour free’ are good examples for maintaining healthy relation with customers. This customer oriented approach, or Customer Relationship Management perspectives at Marks and Spencer helped the business to survive in the highly complicated marketing structures and retain the customers. Conclusion Marks and Spencer is one of the most successful UK large scale retailers in establishing effective operations in terms of operations, workforce, quality and meeting customer expectations. This work provides a case study analysis on various factors that include recruitment, motivation, training and measures that are taken to assess the quality of goods and services offered and meet customer expectations, that led Marks and Spencer achieve great success in its marketplace. References ANDREW SETH and GEOFFREY RANDALL (2001), The grocers: the rise and rise of the supermarket chains. 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