BY:

BY:

AGUSTIN, GERALDINE G.
ARDE, CARLEIL S.D.
FERNANDEZ, GWENDALINE
E.

TERMINOLOGIES

FLAGSHIP STORE- CHAINS LARGEST STORE THAT HOLDS OR SELLS THE HIGHEST
VOLUME OF MERCHANDISE OR A CHAINS FIRST RETAIL OUTLET.

FLAGSHIP- THE BEST OR LARGEST MOST IMPORTANT ONE OF A GROUP OF THINGS

SUCH AS PRODUCTS, STORES, ETC.

TURNOVER- THE AMOUNT OF MONEY THAT IS RECEIVED IN SALES BY A STORE OR

COMPANY.

INTERVENE- OCCUR IN TIME BETWEEN EVENTS

PROFIT MARGINS- EXPRESSED AS A PERCENTAGE AND, IN EFFECT MEASURE HOW
MUCH OUT OF EVERY DOLLAR OF SALES A COMPANY ACTUALLY
EARNINGS.

KEEPS IN

SUBSTANTIAL- LARGE IN AMOUNT SIZE, OR NUMBER

PROBING- SEEK TO UNCOVER INFORMATION ABOUT SOMEONE OR SOMETHING
BUREAUCRACY- A SYSTEM OR GOVERNMENT OR BUSINESS THAT HAS A MANY
COMPLICATED RULES AND WAYS OF DOING THINGS.

MARKS & SPENCER (M&S) IS A BRITISH RETAILING INSTITUTION. FOUNDED IN 1884 BY MICHAEL
MARKS, A POLISH JEW WHO HAD EMIGRATED TO ENGLAND, THE COMPANY HAS BEEN A NATIONAL
CHAIN SINCE THE EARLY 1900S. BY 1926 THE COMPANY HAD A BRANCH IN EVERY MAJOR TOWN IN
THE COUNTRY AND HAD BECOME BRITAINS LARGEST RETAILER, A POSITION IT STILL HELD IN
1996. PRIMARILY A SUPPLIER OF CLOTHING AND FOODSTUFFS, M&S IS ONE OF THE WORLDS MOST
PROFITABLE RETAILERS. IN 1992 M&SS 280 UNITED KINGDOM STORES HAD SALES OF $7.5 BILLION.
M&S ACCOUNTED FOR 15.0 PERCENT OF ALL RETAIL CLOTHING SALES IN THE UNITED KINGDOM,
AND 4.6 PERCENT OF ALL FOOD SALES. ACCORDING TO THE GUINNESS BOOK OF RECORDS, IN 1991
THE COMPANYS FLAGSHIP STORE AT MARBLE ARCH IN LONDON HAD A TURNOVER OF $3,700 PER
SQUARE FOOT, MORE THAN AY OTHER DEPARTMENT STORE IN THE WORLD.

M&S PROVIDES A SELECTIVE RANGE OF CLOTHING AND FOOD ITEMS AIMED

AT RAPID TURNOVER. THE FIRM SELLS ALL ITS PRODUCTS UNDER ITS OWN
ST. MICHAELS LABEL. M&S OFFERS HIGH-QUALITY PRODUCTS AT
MODERATE RATHER THAN LOW PRICES. THIS COMBINATION OF HIGH
QUALITY AND REASONABLE PRICE ENCOURAGES CUSTOMERS TO
ASSOCIATE M&S WITH VALUE FOR MONEY, AND THE FIRMS ABILITY TO
DELIVER THIS COMBINATION CONSISTENTLY OVER THE YEARS HAS BUILT
UP ENORMOUS GOODWILL FROM CUSTOMERS IN BRITAIN. IN FACT, SO
STRONG IS M&SS REPUTATION AMONG BRITISH CONSUMERS THAT THE
COMPANY DOES NO ADVERTISING IN THAT MARKET.

TO ACHIEVE THE COMBINATION OF MODERATE PRICES AND HIGH

QUALITY, M&S WORKS VERY CLOSELY WITH ITS SUPPLIERS, MANY
WHOM HAVE BEEN SELLING MAJOR PORTION OF THEIR OUTPUT TO
M&SS PRACTICE OF HAVING ITS TECHNICAL PEOPLE WORK CLOSELY
WITH SUPPLIERS ON PRODUCT DESIGN. SUPPLIERS ARE MORE THAN
WILLING TO RESPOND TO THE FIRMS DEMANDS, FOR THEY KNOW
THAT M&S IS LOYAL TO ITS SUPPLIERS AND AS IT GROWS SO DO THEY.
THE SALES VOLUME GENERATED BY M&SS STRATEGY OF PROVIDING
ONLY A SELECTIVE RANGE OF CLOTHING AND FOOD ENABLES M&SS
SUPPLIERS TO REALIZE SUBSTANTIAL ECONOMIES OF SCALE FROM
LARGE PRODUCTION RUNS. THESE COST SAVINGS ARE THEN PASSED
ON TO M&S IN THE FORM OF LOWER PRICES. IN TURN, M&S PASSES
ON PART OF THE SAVINGS TO THE CONSUMER.

CRUCIAL TO M&SS EFFECTIVENESS IS A CLEAR FOCUS THE CUSTOMER. THE

TONE IS SET BY TOP MANAGEMENT. EACH SENIOR MANAGER MAKES A
HABIT OF WEARING M&S CLOTHES AND EATING M&S FOOD. THUS
MANAGERS DEVELOP AN UNDERSTANDING OF WHAT IT IS THAT
CUSTOMERS WANT AND LIKE ABOUT M&S PRODUCTS; BY STAYING CLOSE
TO THE CUSTOMER, THEY CAN IMPROVE THE QUALITY AND DESIGN OF THE
PRODUCTS THEY OFFER. THE FOCUS ON THE CUSTOMER IS REINFORCED AT
THE STORE LEVEL BY STORE MANAGERS WHO MONITOR SALES VOLUME
AND QUICKLY IDENTIFY LINES THAT ARE SELLING AND THOSE THAT ARE
NOT. THEN STORE MANAGERS CAN TRANSMIT THIS INFORMATION TO
SUPPLIERS, WHICH HAVE THE CAPACITY TO MODIFY THEIR PRODUCTION
QUICKLY, INCREASING THE OUTPUT OF LINES THAT ARE NOT MOVING.

ON

ANOTHER
ANOTHER CENTRAL
CENTRAL FEATURE
FEATURE OF
OF M&S
M&S IS
IS ITS
ITS PIONEERING
PIONEERING APPROACH
APPROACH TO
TO HUMAN
HUMAN
RELATIONS.
RELATIONS. LONG
LONG BEFORE
BEFORE IT
IT BECAME
BECAME FASHIONABLE
FASHIONABLE TO
TO DO
DO SO,
SO, M&S
M&S HAD
HAD
DEVELOPED
DEVELOPED A
A COMMITMENT
COMMITMENT TO
TO THE
THE WELL-BEING
WELL-BEING OF
OF ITS
ITS EMPLOYEES.
EMPLOYEES. M&S
M&S HAS
HAS
ALWAYS
ALWAYS VIEWED
VIEWED ITSELF
ITSELF AS
AS A
A FAMILY
FAMILY BUSINESS
BUSINESS WITH
WITH A
A BROAD
BROAD RESPONSIBILITY
RESPONSIBILITY
FOR
FOR THE
THE WELFARE
WELFARE OF
OF ITS
ITS EMPLOYEES.
EMPLOYEES. M&S
M&S HAS
HAS ALWAYS
ALWAYS VIEWED
VIEWED ITSELF
ITSELF AS
AS A
A
FAMILY
FAMILY BUSINESS
BUSINESS WITH
WITH A
A BROAD
BROAD RESPONSIBILITY
RESPONSIBILITY FOR
FOR THE
THE WELFARE
WELFARE OF
OF ITS
ITS
EMPLOYEES,
EMPLOYEES, M&S
M&S OFFERS
OFFERS EMPLOYEES
EMPLOYEES MEDICAL
MEDICAL AND
AND PENSION
PENSION PLANS
PLANS WITH
WITH
BENEFITS
BENEFITS THAT
THAT ARE
ARE WELL
WELL ABOVE
ABOVE THE
THE AVERAGE
AVERAGE WITHIN
WITHIN THE
THE INDUSTRY.
INDUSTRY. LIKEWISE,
LIKEWISE,
THE
THE COMPANY
COMPANY PAYS
PAYS ITS
ITS EMPLOYEES
EMPLOYEES AT
AT A
A RATE
RATE THAT
THAT IS
IS WELL
WELL ABOVE
ABOVE THE
THE AVERAGE
AVERAGE
WITHIN
WITHIN THE
THE INDUSTRY,
INDUSTRY, AND
AND IT
IT MAKES
MAKES A
A PRACTICE
PRACTICE OF
OF PROMOTING
PROMOTING EMPLOYEES
EMPLOYEES
FROM
FROM WITHIN,
WITHIN, RATHER
RATHER THAN
THAN HIRING
HIRING OUTSIDE.
OUTSIDE. FURTHERMORE,
FURTHERMORE, THERE
THERE ARE
ARE A
A
SERIES
SERIES OF
OF IN-STORE
IN-STORE AMENITIES
AMENITIES FOR
FOR EMPLOYEES,
EMPLOYEES, INCLUDING
INCLUDING SUBSIDIZED
SUBSIDIZED
CAFETERIAS,
CAFETERIAS, MEDICAL
MEDICAL SERVICES,
SERVICES, RECREATION
RECREATION ROOMS,
ROOMS, AND
AND HAIRDRESSING
HAIRDRESSING
SALONS.
SALONS. THE
THE REWARD
REWARD FOR
FOR M&S
M&S IN
IN THE
THE TRUST
TRUST AND
AND LOYALTY
LOYALTY OF
OF ITS
ITS EMPLOYEES
EMPLOYEES
AND,
AND, ULTIMATELY,
ULTIMATELY, HIGH
HIGH EMPLOYEE
EMPLOYEE PRODUCTIVITY.
PRODUCTIVITY.

ALSO
ALSO VITAL
VITAL IS
IS THE
THE COMPANYS
COMPANYS COMMITMENT
COMMITMENT TO
TO SIMPLIFYING
SIMPLIFYING ITS
ITS OPERATING
OPERATING
STRUCTURE
STRUCTURE AND
AND STRATEGIC
STRATEGIC CONTROL
CONTROL SYSTEMS.
SYSTEMS. M&S
M&S HAS
HAS VERY
VERY FLAT
FLAT HIERARCHY
HIERARCHY ;;
THERE
THERE IS
IS LITTLE
LITTLE IN
IN THE
THE WAY
WAY OF
OF INTERVENING
INTERVENING MANAGEMENT
MANAGEMENT LAYERS
LAYERS BETWEEN
BETWEEN STORE
STORE
MANAGERS
MANAGERS AND
AND TOP
TOP MANAGEMENT.
MANAGEMENT. THE
THE FIRM
FIRM UTILIZES
UTILIZES JUST
JUST TWO
TWO PROFIT
PROFIT MARGINS,
MARGINS,
ONE
ONE FOR
FOR FOODSTUFF
FOODSTUFF AND
AND ONE
ONE FOR
FOR CLOTHING.
CLOTHING. THIS
THIS PRACTICE
PRACTICE REDUCES
REDUCES
BUREAUCRACY
BUREAUCRACY AND
AND FREES
FREES ITS
ITS STORE
STORE MANAGERS
MANAGERS FROM
FROM WORRYING
WORRYING ABOUT
ABOUT PRICING
PRICING
ISSUES.
ISSUES. INSTEAD,
INSTEAD, THEY
THEY ARE
ARE ENCOURAGED
ENCOURAGED TO
TO FOCUS
FOCUS ON
ON MAXIMIZING
MAXIMIZING SALES
SALES VOLUME.
VOLUME.
CONTROL
CONTROL IS
IS ACHIEVED
ACHIEVED PARTLY
PARTLY THROUGH
THROUGH FORMAL
FORMAL BUDGETARY
BUDGETARY PROCEDURES
PROCEDURES AND
AND
PARTLY
PARTLY THROUGH
THROUGH AN
AN INFORMAL
INFORMAL PROBING
PROBING PROCESS,
PROCESS, IN
IN WHICH
WHICH TOP
TOP MANAGEMENT
MANAGEMENT
DROPS
DROPS IN
IN UNANNOUNCED
UNANNOUNCED AT
AT STORES
STORES AND
AND QUIZZES
QUIZZES MANAGERS
MANAGERS THERE
THERE ABOUT
ABOUT THE
THE
STORE.
STORE. IN
IN A
A TYPICAL
TYPICAL YEAR,
YEAR, JUST
JUST ABOUT
ABOUT EVERY
EVERY STORE
STORE IN
IN BRITAIN
BRITAIN WILL
WILL RECEIVE
RECEIVE AT
AT
LEAST
LEAST ONE
ONE UNANNOUNCED
UNANNOUNCED VISIT
VISIT FROM
FROM TOP
TOP MANAGEMENT.
MANAGEMENT. THIS
THIS KEEPS
KEEPS STORE
STORE
MANAGERS
MANAGERS ON
ON THEIR
THEIR TOES
TOES AND
AND CONSTANTLY
CONSTANTLYALERT
ALERT TO
TO THE
THE NEED
NEED TO
TO PROVIDE
PROVIDE KIND
KIND
OF
OF VALUE-FOR-MONEY
VALUE-FOR-MONEY PRODUCTS
PRODUCTS THAT
THAT CUSTOMERS
CUSTOMERS HAVE
HAVE TO
TO ASSOCIATE
ASSOCIATE WITH
WITH M&S.
M&S.

I.

TITLE: MARKS &

II.

VIEWPOINT: MICHAEL MARKS,

SPENCER

III. TIME CONTEXT: EARLY 1900S

FOUNDER OF MARK & SPENCER

IV.SWOT ANALYSIS
STRENGTHS

WEAKNESS

Britains largest retailer

M&S is one of the worlds most profitable retailer
In 1992, M&Ss 280 United Kingdom stores had
sales of $7.5 billion.
According to Guinness Book of Records, in 1991
the companys flagship store at Marble Arch in
London had a turnover of $3700
Provide a selective range of clothing and food items
aimed at rapid turnover.
Offers high-quality products at moderate rather than
low prices.
Works very closely with its suppliers to achieve the
combination of moderate prices and high quality.
Sales volume generated by M&S strategy enables
their suppliers to realize substantial economics of
scale from large production runs.

No advertising
The company had a branch in every major town in
Britain

STRENGTHS
Clear focus on the customers by making each
senior manager wears M&S clothes and eat M&S
food, thus they develop understanding of what the
customers like about M&S products.
Pioneering approach to human relations
Simplified operating structure and strategic control
systems.
Supplier of clothing and foodstuffs
Accounted for 15.0 percent of all retail clothing
sales in United Kingdom, and 4.6 percent of all
food sales.


COMPETITIVE ADVANTAGE
EFFICIENCY

MAINTAIN A GOOD RELATION OR COORDINATE WITH ITS SUPPLIERS

SENIOR MANAGERS MAKES IT A HABIT TO WEAR M&S CLOTHES AND EAT M&S FOO, THUS MANAGERS

DEVELOP AN UNDERSTANDING OF WHAT IT IS THAT THE CUSTOMERS WANT AD LIKE ABOUT M&S PRODUCTS.

INCREASING THE OUTPUT OF LINES THAT ARE SELLING WELL AND REDUCING THE LINE OF OUTPUT OF LINES
THAT ARE NOT MOVING.

STRATEGY OF PROVIDING ONLY A SELECTIVE RANGE OF CLOTHING AND FOOD ENABLES M&S SUPPLIERS TO
REALIZE SUBSTANTIAL ECONOMICS OF SCALE FROM LARGE PRODUCTION RUNS.

UNEXPECTED VISITS FROM TOP MANAGEMENT

QUALITY

- MODERATE PRICES AT HIGH QUALITY

CUSTOMER RESPONSIVENESS

- COMBINATION OF HIGH QUALITY AND REASONABLE PRICE ENCOURAGES CUSTOMERS TO ASSOCIATE M&S
WITH VALUE FOR MONEY.