marks and spence- the phoenix rises
TRANSCRIPT
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By-
Divya Gomber Amrit KumarPriyata Bhakat Haaris FarooquiDeepak Verma Sagar Saxena
Vidushi Gupta Shantanu Khare
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Mark & Spencer: UKs largest retail firm inmore than 700 locations across 34 countries.
Company involve in selling clothing, the food,home furnishing, footwear etc.
This case talks about the steps taken torestore M&S as a retail power considering theclothes, the food and the financial services.
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Started by Mark Simon in1882
Control of merchandise generated by thecentral organization that was
Acutely sensitive to consumer demand
Could adjust to the flow from factories to the
stores as required
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By 1960 M&S had a dominant position in UK
Simple strategies
o Offered narrow ranges of goods of high quality and value
o Numbers ofSKUs are small
o Clothing were fashionable but not high fashion
o Food line comprised of perishables of highest quality
Formula delivered on value premisePartnership with suppliersPartnership with employeesPartnership with customers
By 1975 M&S was on every High Street of every major English City.
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In 1970s, Conditions in UK were depressing. Economy was suffering with strikes, high interest
rates and unemployment. Entry into Canada through acquisition of two retail
chain failed drastically.Later, Entry in the European continent was successful
through France in 1975.
Innovation Introduced Marks and Spencer charge card ( 1985 ) Franchise operations in some countries. Extending Core product ranges Consumer Financial Services
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Top Management Re-organization failed
Asian Crisis and currency appreciation
Heavy Investments
Changing consumer interests
New strategy adopted by competitors
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In-house fighting
Multiple Layoffs
Poor Corporate Culture
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Focus more on brand rather than product
On shore and offshore
Best value
Sales went off the cliff
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On March 2000, he took over the leadreship
Focused on building a new team
On September 2000, Salsbury, Clara and McCracken left the company
Vandevelde reconstituted the Leadership team
Thus, at the fall of 2000, the Leadership team comprised of
Luc Vandevelde
Chairman & CEO
Alan McWalter
Executive
DirectorMarketing
David Norgrove
Executive Director
Strategy &International
Robert Colvill
Executive Director
CFO
Cherie Lafland
Director
Communication
Graham
Oakley
Co. Secretary
Gary
Executive Asst. to
Luc Vandevalde
Richard Gillies
Director of Change
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Luc Vandevelde
Chairman & CEO
Alison Reed
Executive
Director
CFO
Laurel Powers
Freeling
Executive Director
Fin. Services
Roger Holmes
Executive
Director
UK Retail
David Norgrove
Executive Director
Strategy &
International
Vincent McGinlay
Director
Supply Chain
Maurice Helfgott
Buss. Unit
Director
Steven Longton
Buss. Unit
Director
Michelle
Jobling
Buss. Unit
Director
Yasmin YusufCreativeDirector
Richard Wolff
Retail Director
International
BarryStevenson
Retail DirectorUK Stores
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Acceptance of fight for survival
Three point program
a) Total focus on UK retail:
i. Recovery plan for clothing.ii. Expansion in areas like food, home & beauty.iii. Acceleration of store renewal program.iv. 100% own brand policy.v. Sub branding in clothing to reflect the more segmented lifestyle.
vi. More intensive use of space.
b) Program of value realization.
c) Return of 2 billion pounds to shareholders.
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Strategies- 100% focus on UK Retail and Financial Services
- Realize value
- Capital Restructuring
- Platform for exploitation of unique strengths
Values, Vision and Mission
- Quality, Value, Service, Innovation and Trust
Unique Strengths
- 100% own brand (Per Una)
- Command of Supply Chain (Faster TTM)
- Economies of Scale
- Superior Quality
Ways of Working
- Customer centric
- Team working
-Be Honest and Confident
CUBE 1(Recovery plan)
CUBE 1
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A small version of cube were placed on the desk of thousands ofemployee.
Clothing was where M&S lost customer confidence and market share.
George Davies was appointed to develop a sub brand Per Una.
Incentives of 10% was given to 5 million charge card holders.
Meanwhile M&S was busy framing their recovery plan others brandlike ZARA also started evolving at a remarkable speed.
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Yasmin Yusuf was appointed as creative director to handle theresponsibility for upgrading the quality of fashion.
Steve Longdon had the job of making women's clothes available at
the right time in stores.
Barry Stevenson was appointed for store renewal program.
Successful launch of Per Una brand.
Improvements needed in the supply chain.
Less outsourcing of goods.
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Taken for changes in design & sourcing ,better product, lower cost and
faster TTM
Zip(for childrens line)
Eliminating duplication of cost.
Achieving faster TTM. Simply food
Convenience format located in high customer flow areas.
Stores targeted at two segment.
Good variety of products
Home Sourcing directly.
Establishing consistency and coherence across the range.
Financial services
Improving the card used by 3 mn people for greater services.
Re-establishing a tight relationship with customers.
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Future strategy focused on eliminating competition by:-
Trying to achieve the peak productivity.
Segmentation the market based on customer needs.
Moving from products to creating experience and lifestyle. Improve efficiency and productivity.
Promoting CSR activities to add to the value chain.
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Cube2
Employee
Engagement
Theme 1
Good betterBest
Theme 2
Products to
experience
Theme 3
BetterEfficiency &Productivity