Marks & Spencer Analysis Essay
Global retailer Marks & Spencer is the United Kingdom's premier clothing, food, and financial services retailer. The company's commitment to value, service and quality began in 1884 when Michael Marks, a Russian born Polish refugee formed a partnership with Tom Spencer, a former cashier from the wholesale company IJ Dewhirst, which later on became Marks & Spencer. During this 120-year journey, Marks & Spencer has continuously evolved and is known as one of the biggest retailers in the world today.
Marks & Spencer moved in food business in 1931 and initiated financial services business in 1985 with their charge card. The group has around 68,000 employees and serves 15 million …show more content…
Tesco, competitor of M&S, reported a net profit of £1.57 billion for the year 2006. Total sales enjoyed a surge of 31.9% at £1 billion. Non-food sales grew by 13%, clothing sales grew by 16% in a difficult market. Tesco Personal Finance reported an operating profit of £205 million, a growth of more than 50% over last year3.
A buying academy was set up by M&S in 2005 to manage the buying department. This was to ensure a tight control over all aspects of buying. Weekly targets were set to control inventory levels at every part of the supply chain and to reduce inventory for products depicting falling demand. Regional sourcing directors were recruited to focus on a single approach to direct buying. Various measures were taken to improve the supply chain. For example, regional offices were established in Turkey and India to coordinate the supply function. Moreover, M&S also set up a stock planning function to coordinate budgets and reduce the risk of overbuying and under-stocking1.
1Marks & Spencer PLC-Retailing, Global Market Information Database, Euromonitor International, 2006.
2Marks & Spencer Annual Report, 2006
3Tesco Annual Report 2006.
In the face of low