The Major Challenges Marks and Spencers Facing - Essay Example

?What are the major challenges facing this organisation? Marks and Spencer’s (M&S) has always enjoyed a strong M&S brand, strong retail and trading, and strong quality. The main issues that have affected the brand are product, price and stores (Ruddick, 2012). It has been facing survival crisis amidst intense competition (Mellahi, Jackson and Sparks, 2002). In addition they have not been spending on marketing. Its competitors include the traditional rivals such as John Lewis and Next, and in addition very recently Primark, with its low-cost clothing has changed the face of British High Streets (Ruddick, 2012a). Long after its competitors had started sourcing cheaper goods, M&S adhered to its ‘buy British’ policy (Mellahi, Jackson and Sparks, 2002). They believed that this was what its customers preferred. They also did not believe in any form of marketing. They only engaged in announcing new stores opening and never promoted the brand or its products. When a product range was not successful they merely sold it a discount. They did not accept credit cards for long time and launched its own in-house store card. They even did not venture into out-of-town retailing. Even when stuck with crisis, the management did not scan the environment and respond effectively to the environment. All their actions and decisions demonstrate that they wanted to remain isolated from the rest of the world, from the retail trends and from consumer expectations. M&S has also been criticized and faces legal issues for its attitude and behaviour towards its workers. The stores have a drab ambience and their product range has not been able to keep up with the trends. The retailer has not been able to keep to with the trends and hence competitors have very easily taken over this retailer (Ruddick, 2012). They have been stocking items that have been popular in the past without evaluating the current customer preferences. They have not been able to find the right formula that would appeal to its core customers as well as to the wider demographic in the UK. In addition, the retailer is experiencing stock management mistakes as a result of which the best items remain out of stock. All these have resulted in loss of market share in women’s wear. Its expenditure on marketing has also reduced. Another issue at M&S appears to be unclear organizational capability. A lot of new recruits have been taken in who have yet to familiarize themselves with what the M&S customers want. In addition, M&S has poor online and multichannel capability and a complex and inflexible supply chain (Ruddick, 2012). These factors suggest that M&S had become complacent and believed that customer loyalty that it enjoyed in the past would be sufficient to see them through tough times. However, it has been a lesson for other retailers as well, that with times retail trend has to change. The external environment has to be considered in all decisions to not merely survive but also to gain competitive advantage. Besides, the management must have the capability to evaluate situations and take corrective actions. What use does this organisation make of technology? Where do you think there may be a chance to improve in this area? M&S is making investments in technology to enhance its customer service delivery. For instance, it is investing ?100 million in in-store technology such as iPads for customer assistants and ?150 million on a new website (Ruddick, 2012), and ?2.4 billion on online offering (Ruddick, 2012a). The intention behind equipping the customer assistance with tablets is to improve its customer service, better integrate its customer service and also enable the customers to have access to a wider range of products (Baker, 2012). This would enable them to help customers buy products online that may not be available in-store. In addition, their free apps for iPads allows customers to shop for everything for home (M&S, 2013). M&S is also upgrading its RFID platform to include home good such as bedding, accessories and kitchenware (Violino, 2013). They will replace this with newer RFID technology including EPC Gen 2 which means read-write tags and readers. This new system is expected to fetch better returns on investments. M&S has also installed digital kiosks in newly introduced beauty departments which enables the customers to access the online tools like the “virtual makeover” (Baker, 2012). To drive its multi-channel operations, the organization is creating a digital lab (McDonald, 2013). This would help them to experiment freely and become innovative. M&S has appointed Kyle McGinn, to head a team that will pilot cutting-edge technologies which would enable them to compete with youthful digital companies. For analysis of its business and opportunities, M&S is shifting its platform from Oracle to SAP (enterprise resource planning, ERP). In addition, they are also shifting from the Amazon platform to their own e-commerce offering (Stein, 2012). They also intend to use technology to create single efficient operations for the entire company rather than separate operations for food and general merchandise at it had before. While M&S has made plans to invest in technology and use it across different platforms aimed at enhancing customer experience, there is no evidence of involving the customers in product development. Thus one of the ways that they could use Web2.0 technology is by inviting customers to participate on web forms on the company website and leave their experience with the product and service. This would also help the company to understand customer expectations and amend their offerings. M&S has already provided the customer assistants in-store with iPads to enhance service. The same tablet can also be used to provide continuous feedback to the designing and marketing divisions of what the customers want. Another technology that they could employ is to tie up with firms such as Capillary Technologies that offer cloud-based software solutions that help businesses to intelligently engage customers through mobile, social and in-store channels (PR Newswire, 2013). Fashion retailer REDTAG has already started its first rewards and loyalty program based on this cutting-edge technology. This will not only enhance customer loyalty but also drive customers’ shopping experience. In addition, brand loyalty will be instilled with personalized and targeted marketing. This is expected to drive footfalls and conversions. What consideration is given to the environment by the organisation? Marks and Spencer’s consideration for the environment has been phenomenal to the extent that they were the first retailer to engage in addressing environmental and social concerns. M&S launched its Plan A and Behind the Label campaign to reduce its carbon footprint and increase the healthiness of its products. M&S had conducted a survey among its consumers and found that they preferred ethical sourcing and healthier food (Data Monitor, 2007). The consumers particularly expressed concern over how the clothing had been stitched. Based on the concern for green and ethical issues, M&S launched the Behind the Label campaign. Behind the Label had given indications of the company’s concern for the environment and the society. It informed the customers of the way they sourced the products and made the products. They also tried to minimize packaging and introduce healthier ingredients. In addition, they tried to create awareness among its stakeholders of its CSR initiatives by marketing the campaign in billboards, in newspapers and also through its stores. This campaign promoted Fair Trade line which now includes over 70 cotton-based items, thereby making M&S the biggest retailer of Fair Trade cotton on the UK retail market. M&S sources cotton from farmers across India, Senegal, Mali and Cameron. According to M&S these farmers use Fair Trade premium to invest in philanthropy in their region. In addition to clothing, the retailer has also converted its entire range of tea and coffee to fair trade. This strategy enhanced the sales as well as increased the value of Fair Trade tea. When it launched its Plan A eco-plan in January 2007, it was the first major UK retailer to address environmental and social issues at the workplace. This strategy was aimed at becoming carbon neutral, extend sustainable sourcing, send no waste for landfill, and set new standards in ethical trading apart from supporting its employees and customers to live a healthier lifestyle. It had planned to invest ?200 million in his campaign and had the support of various environmental groups. This was a major initiative on the part of the retailer in creating a sustainable society. This initiative also addresses the concern of the customers who prefer ethical products as they have become environmentally consciousness. As part of their initiatives, they banned the use of 56 chemicals that could be a risk to the environment, factory workers and their customers. They also removed harmful chemical used in children’s clothing and removed hydrogenated fats, artificial colors, favour enhancers and flavorings from all ready meals marketed by them. They recycled plastic and carried out durability tests on samples from their clothing range. Its initiative to offer organic vegetables also contributes towards reducing the carbon footprint. Despite all their endeavours towards a customer-centric approach, M&S realized that it is not possible to please all the customers at the same time. This is view of the fact while they sourced local produce they also emphasized on organic food and Fair Trade which due to which they had to source from other countries. References Baker, R. (Aug, 6, 2012). M&S in digital store overhaul. Marketing Week. Retrieved from http://www.marketingweek.co.uk/news/ms-in-digital-store-overhaul/4003111.article Data Monitor. (2007). Whole Foods and Marks & Spencer case study. CSCM0117/ Published 03/2007 Retrieved from Ebsco Host M&S. (2013). The Whole Store in Your Pocket. Retrieved from http://www.marksandspencer.com/MS-Mobile-App/b/1954552031 McDonald, G. (Feb. 1, 2013). Marks & Spencer launches digital lab to fuel multichannel growth. Retail Week. Retrieved from http://www.retail-week.com/multichannel/marks- and-spencer-launches-digital-lab-to-fuel-multichannel-growth/5045543.article Mellahi, K. Jackson, P. & Sparks, L. (2002). An exploratory study into failure in successful organizations: The case of Marks and Spencers. British Journal of Management. 13, pp. 15-29 PR Newswire. (March. 14, 2013). Fashion Retailer REDTAG Partners With Capillary Technologies to Launch 'rt rewards' Program in Middle East. Retrieved from http://www.prnewswire.com/news-releases/fashion-retailer-redtag-partners-with-capillary-technologies-to-launch-rt-rewards-program-in-middle-east-197917781.html Ruddick, G. (Nov. 4, 2012). A street fight Marks & Spencer has to win. The Telegraph. Retrieved from http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9653122/A-street-fight-Marks-and-Spencer-has-to-win.html Ruddick, G. (Nov. 7, 2012a). M&S kitted out to fight new wave of rivals. The Telegraph. Retrieved from http://www.telegraph.co.uk/finance/newsbysector/epic/mks/9660423/MandS-kitted-out-to-fight-new-wave-of-rivals.html Stein, D. (2012). Marks & Spencer Group. Retrieved from http://www.cio.co.uk/cio100/2012/marks-spencer-group/ Violino, B. (Marc. 25, 2013). Marks & Spencer Rolls Out RFID to All Its Stores. RFDI Journal. Retrieved from https://www.rfidjournal.com/purchase-access?type=Article&id=10536&r=%2Farticles%2Fview%3F10536 Read More