Online Users

Custom Search

Categories

« Retail Marketing - Explain critical areas in quality service, a promotion schemes and corporate ethics that can help to build a retail store image | Main | Strategy Analysis »

03/28/2012

Strategic Management Of Marks and Spencer and Sainsbury


The focus of this paper is on strategic management, upon understanding its concepts, techniques as well as theories that manifests strategic management process that functions from recognizing of such strategic based tools such as Porter’s value chain analysis and five forces model along with marketing mix tenets and other appropriate strategies. There caters to the role of strategic management in planning such business development, of ample knowledge and practice in the application of strategic management paradigm. The paper will focus on two companies operating in the same business industry, Marks and Spencer upon comparison and contrast to Sainsbury, reviewing such strategic position as well as Marks and Spencer and Sainsbury corporate strategies along with certain qualitative and quantitative data. Thus, identify ways in which Marks and Spencer and Sainsbury are gearing up to cope with current global crisis from business situation.  Amicably, desirable strategies at Marks and Spencer and Sainsbury is at the core of this discussion wherein there can be competencies and factors that will put in a critical comparison and contrasting domains of the two companies, both located in the United kingdom.

Porter’s five forces model (Porter, 1980)

Bargaining power of customers

For Porter’s five forces strategy as illustrated below accounts an ideal concept for Marks and Spencer over rival Sainsbury and vice versa. Marks and Spencer, a UK based retailer which sells clothing, footwear, gifts, home furnishings and foods implying chain of stores in United Kingdom. The power of customers are of vital stature not just at Marks and Spencer but also at Sainsbury wherein customer relations is at the core of strategic move and integral to the proper handling of success factors and other competencies.  For example, the use of website information as well as on line catalogs does help Marks and Spencer achieve strong customer base, providing customers with easier access to products and services like clothing lines and groceries.  Thus, Sainsbury may seem to fail on customer care but not for long and that Marks and Spencer have responded also on customer based promos and offers wherein strategic decisions go up in positive motion for sales and gains.

Threat of new entrants

Retail expansion is largest of operating expansion wherein new market entrants are known about as Marks and Spencer allocate resources through strategic base of global business and expansion, and relevant and significant changes to Marks and Spencer business strategy imposed greater options for stability as compared to Sainsbury wherein possible entry points are not happening unlike Marks and Spencer the company have expanded well outside the UK zone while Sainsbury is in its better shape in the UK market. There has been research and development by means of RFID technology at Marks and Spencer.

Competitive Rivalry

Competition is everywhere, it arises from time to time as such the image of Marks and Spencer has gained popularity over Sainsbury when it comes to international strategic base and achieve progress in the area of clothing lines such as menswear an d lingerie for women really surging up with Sainsbury in terms of other services such as in groceries and other areas  Marks and Spencer worked to achieve esteem by applying structured formula to its operations and maintained it by establishing a set of fundamental principles. Thus in order to compete and survive strategic challenge and fierce competition Marks and Spencer will have to redirect and adjust business strategy in order to meet the needs of the global market and keep a better shot on marketing mix with Sainsbury’s current business position.

Bargaining power of suppliers

Suppliers play a role at Marks and Spencer and Sainsbury as such these companies utilize various supply chain management drivers that allows a wide supplier base and logistics to products and services offered. Marks and Spencer has been setting standards in supply chain performances and attain to quality of marketing tools and that supplier appeal and value of supply chain goods can be at a high rate. For Sainsbury, just in time supply chain is being used and has focused on supply logistics even with less entrance to other countries outside UK. Marks and Spencer is for inbound and outbound supply logistics while Sainsbury is trying to execute more on just in time supply chain performance.

Threat of substitute products 

There can be threats of substitute products that may affect the standing of each of the company and will put business operations and strategy at risk. Marks and Spencer is expected to be careful in terms of product branding and image wherein there should be patent to each product launched and offered by the company. Sainsbury can do the same but certain constraints should be known, that products and services of these companies must be of greater durability and quality and will not allow substitute products to eat up with originality and company reputation as known for Marks and Spencer and Sainsbury.  

McKinsey 7's model

For McKinsey 7's model, detailed information can surge up strategic competence at Marks and Spencer and Sainsbury wherein shared values should be found at the center core of these companies keeping in mind that strategy works well when values are feasible, timely and can be measured along with lead time chains and logistics    

Strategy: 

The strategy of Marks and Spencer is to keep in reasonable services for the customers with best quality of products and services and grow along with each of the employees from within branches; serving customers well with innovative brand image upon sustaining competitive advantage and integrate more on strategic position and such management effectiveness. Sainsbury is more of a small based strategy but using a much better strategy in managing and handling such supply chain in making business more accountable and open to profit and sales stabilization and should not focus on strategies that are too large to realize.

Structure: 

Marks and Spencer structure is more on hierarchical while Sainsbury is more of a cluster type and that there should have better structure to follow and be in shape with an idealistic strategic planning that will gradually change traditional structures to modern ones and will lessen chances of issues that goes along with strategic management. Marks and Spencer gives importance to their executive board with the CEO/chairman as the head of the business which is likely of the same nature with Sainsbury.

Systems: 

The systems at Marks and Spencer is centered on the job role of every employees as such as sales personnel daily activity will include customer care and entertain them in order to persuade customers to buy their products and patronize over the others, this process can be through engaging into marketing strategies that uses a technology based tool such as computer based promotions wherein a customer can log in a number and enter if there entitle to a raffle entry or not. System strategy is also imperative by cashiers wherein prices and amount of money is being entered for receipts recording and proof of purchase, the activity is also the same with Sainsbury wherein job roles are known and individually recognized. Another is the duty of the HR managers to monitor daily attendance of the employees, and have training orientation SOPs to new employees both noticeable at Marks and Spencer and Sainsbury.

Shared Values:

For the shared values, Marks and Spencer have made use of effective shareholder value, and able to maintain good standing position in the business. The value of key players as well as strategic models and approaches used in business operations and the presence of Marks and Spencer leadership, culture, strategic environment and expertise in the area of putting standards and quality of services. Sainsbury had applied also appropriate strategies and have contributed to the staying power of the business and be accustomed to sharing of values that apply to strategic ways on a focus of management excellence and the value of catering to the needs of every customer and be of good values at all times.

Style:  

For leadership style, Marks and Spencer adheres to various style of leadership there can be about transformational leadership wherein the company sets goals and objectives in accordance to present market situation, these leadership transforms how well the company responds to an effective workforce that is found in best shape employees Marks and Spencer ever had. Thus, Sainsbury is also touching on transformational leadership but presents a mixture of charismatic leadership style for instance, Sainsbury always give warm greetings to their customers upon entering the store vicinity and employees are courteous and polite to attend the needs of the customers and the store. Charismatic leadership is also seen at Marks and Spencer for example, how HR area gives attention to training and other positive plans reflect a sense of charisma that employees need in order to work well with synergy and dynamics of the business stature.       

Staff:

For Marks and Spencer staff, the executive head leads the company and that capabilities are based on experience and good record of attitude and behavior, there embodies a true service that each of the staff should realize into and that considerations can be also due to performance assumptions such as Marks and Spencer HR manager has the power to select and hire employees based on some criteria and also same with Sainsbury wherein the executive officer is the head of the company and that other employees have a unique function to do in the company. HR manager at Sainsbury also performs selection and hiring process.

Skills: 

The actual skills and competencies of Marks and Spencer employees can deemed at effectiveness to bring in more customers on the side and have the products get sold. The work of customer care personnel is to convince customers to buy the products in a good manner and approach. Thus, should be a graduate from college of business management, finance or accounting. On the other hand, Sainsbury employee skills are based also on training under the supervision of the company. The skills are also based on employee achievement and credentials such as those of preferable educational background like, Marks and Spencer and Sainsbury HR manager have to be a graduate of office administration management and or psychology based courses.

The McKinsey 7s model is one that can be applied to team effectiveness issue as once these inconsistencies are revealed, there can work to align the internal elements to make sure they are all contributing to the shared goals and values and move Marks and Spencer and Sainsbury strategic cycle forward.

Porter's Value Chain Analysis

Marks and Spencer should focus on delivering goods to its customer in the best possible way and customers should receive a product that should satisfy him completely.  There is a need to improve its strategy in relation to its inbound logistics, operations, and suppliers, store designing, layout and so on. For instance, Marks and Spencer warehouse should be clear of old stocks to make space for new updated stocks and will need to look at improving in packaging and related issues. Thus, Sainsbury must consider more use of technology to facilitate its internal official functions that will intern help in smooth and fast running of its services to its suppliers as well as to its customers. Strategic base need to return to selling their own brand products and brands exclusive to Marks and Spencer as it guarantee customers the quality, value and service they have come to expect of significant improvements in product availability and value rebuilding the relationships with its customers. Thus, sharpen pricing by rebalancing the price architecture, extending the range of entry-price merchandise and communicating to customers. Marks and Spencer and Sainsbury need to perform well and has earned customers' trust for providing quality, innovation and convenience for future growth and have lasting opportunities to expand through innovative store locations and selling channels. Creating efficient infrastructure, HRM, procurement and logistics for marketing and sales for faster business growth of financial positions and flexibility to cope with crisis.

 

File:Porter Value Chain.png

Porter, M. E. (1996). What is strategy? Harvard Business Review, November-December, 61-78.The value chain

Marketing Mix

For marketing mix, Marks and Spencer is just an edge away of Sainsbury and that the mix conforms to product, price, place and promotion wherein strategic choices is up for grabs for these companies and there accounts to salient information. Marks and Spencer are averse to marketing because of conviction to brand offering and that  advertising have confined to new store openings and did promote innovative products  and services (Mellahi et al., 2002; Bevan, 2002). However, Sainsbury on the other note is being strategically open to make changes towards their management and positive to new store sites and that competition between Marks and Spencer and Sainsbury hits up in rigidity and result into high and low product prices as charged by Marks and Spencer and Sainsbury finance division. Marks and Spencer is characterized by continued success, overwhelming belief in the company’s management paradigm (Mellahi et al., 2002) of management. Furthermore, top management tended to underestimate Sainsbury in terms of product promotions wherein affecting the strategic landscape and due to corporate issues (Johnson and Scholes, 2002). Marks and Spencer employee positions and departments became powerful and prestigious because of strategic success of the company. Meanwhile, Sainsbury in its business managers were unable change from the long-established routines and challenged new problems with old routines and procedures and undertake new practices (Bevan, 2002). Sainsbury and Marks and Spencer will be considering strategic growth as essential element in sustaining competitive advantage and be successful in providing services and products without the need to match with other retailers. Growth as confined to quantity of market share and by continuing to increase strategic options, staying close to certain core competencies and keep strategic advantage.

 

File:Marketing-Mix (en).png

Koichi Shimizu (2003)"Symbiotic Marketing Strategy,"4th edition, Souseisha Book Company.

Reflection on analysis

Marks and Spencer and Sainsbury to always have a strategy control, there is a need to undertake critical review of overall marketing goals and effectiveness and that these companies should reassess strategic approach to the market place with marketing-effectiveness reviews and market dominance. There's no doubt that for effective stature of strategic management such as lower price indications, Sainsbury's is best compared to Marks and Spencer but for quality and style and a strong commitment to ethical business and environment, Marks and Spencer has the edge.  To survive in today’s globalization is important, the companies have opportunity to go global to improve and expand its business and consider overseas supplier which will give strategic advantage, maximizing technology to improve strategic functioning and advantage.

Conclusion

Therefore, strategic management is one vital approach that every active organizations and companies must utilize and act upon with in realization to strategic business oriented plans and choices such as those that accounts to marketing tools to effectively assess micro and macro environment at Marks and Spencer and Sainsbury respectively. Strategic management is a sweet move towards a more productive and effective business standing and market leadership of these companies in focus.

References

Bevan, J. (2001). The rise and fall of Marks and Spencer. Profile Books, London.

Koichi Shimizu (2003). Symbiotic Marketing Strategy, 4th edition, Souseisha Book Company.

Mellahi, K., Jackson, P., and Sparks, L. (2002). An Exploratory Study into Failure in Successful Organisations: The Case of Marks & Spencer', British Journal of Management, Vol.13

Porter, M.E. (1980). Competitive Strategy, Free Press, New York, 1980.

Porter, M. E. (1996). What is strategy? Harvard Business Review, November-December, 61-78.The value chain

 

 

 

 

 

comments powered by Disqus

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

The comments to this entry are closed.

Get posts by email address:

Delivered by FeedBurner








Blog powered by TypePad
Member since 09/2011