Question:
Discuss about the Managing Information and Technology in regard to Mark and Spencer.
The report is a discussion on managing information and technology. The chosen organization is Mark and Spencer. In the report, there is a brief introduction of the organization and identification of its present business strategy. There is also discussion about the products and services of the chosen company. Pestel analysis of Mark and Spencer done which also finds a mention in the report. There is further discussion on the three primary activities in porter’s value chain that includes inbound logistics, operations and outbound logistics and discussion on the supporting activities. The report also puts forward a reflection of how the deployment of the information technology could its business processes.
Marks and Spencer represents a major British multinational retailer headquartered in Westminster City of London. The company finds a listing in the London Stock Exchange. Mark and Spencer however specialize in selling luxury food products, home products and clothing line. Michael Marks and Thomas Spencer found the company in the year 1884 in Leeds. The company also sold branded goods and presently had 979 stores across United Kingdom out of which 615 are solely dedicated to selling of food products (Marksandspencer.com 2017). The company was also the very first British retailer that made pre-tax profit close to 1 billion pound. However, the company went through a sudden slump that surprised everyone including retail analyst, hundreds and thousands of investors and shareholders. The recent picture of the company shows that there has been an increase in their food sales and decrease of their clothing sales.
The unique retailing formula of the company is making it successful in increasing number of markets around the world. The company thus holds on to a strategy of accelerating its overseas expansion while continuing to exploit the opportunities of growth in United Kingdom. Mark and Spencer in addition to focusing on three main generic strategies cost leadership, differentiation and focus focuses on alternative strategies that relates to substantive growth. The substantive growth of the company however includes horizontal and vertical integration, related and unrelated diversification (Corporate.marksandspencer.com 2017). The horizontal integration refers to the fact that the company makes their product available to a wide range of clientele as Mark and Spencer sell products ranging from food to clothing line from a wide range of manufacturers. Thus, customers can choose from a wide variety of products under a single roof. As a part of the vertical integration, the company employs a targeted approach that focuses in serving a wide range of customers. About related and unrelated diversification, the company happens to sell a diverse range of products that are related as well as unrelated like clothing and food.
Marks and Spencer primarily deals in home ware, food, technology, beauty, financial services, energy, hospitality and clothing. The company has a huge collection of clothing line under different brand names that caters to children, women, businesspersons and men (Marksandspencer.com, 2017). However, some of the prominent Mark and Spencer brand includes limited collection for men, women and children, per una for females, north coast for men, portfolio for men and women, indigo collection for female and boys, autograph for unisex and male, blue harbor for men.
PESTEL analysis refers to analyzing the external environment of the company where external environment refers to the factors that indirectly or directly affects the company’s internal function, objectives and business strategy (Thompson and McLarney 2017). These factors are out of control of the organization however, the company can take necessary action to prevent them. The most common external factors include political, economic, social, technological, environmental and legal.
Political
The Mark and Spencer (M&S) favored by the country’s free trade agreements that have led to the decrement in the sourcing cost. This was necessary as the high cost structure proved to be disadvantageous to the M&S in the international markets (Mohamed and Daniel 2012). The company though has a planned initiative for corporate social responsibility but lack of clarity of the UK government on the energy efficiency schemes negatively affected M&S
Economical
The discounted pricing the competitors affected M&S. However, the company focused solely on the quality of which hiked the price that resulted in temporary loss of the organization. Later on realization, the customers got attracted to high quality with value. The confidence of the customers on the company has enabled it to enhance its quality (Barrientos 2013). However, the onset of the financial crisis gave rise to price sensitive customers therefore the company forced to work on with the flow of the market in order to ensure sustained sales. This is because the customers then looked out for online as well offline value deals.
Social
The transition from the baby boomers into the millennial and generation X ensures the requirement of a changing strategy for catering to the newer segment. Most of the baby boomers at the present age are retired people and their preference no longer holds value. These people mostly show interest in green and organic produce that requires rethinking of the brands that needs consideration to be included by M&S (Raynolds 2012.). Moreover, the company undertook some fresh analysis on the customers of Britain who prefers fashionable styles to classic trends. Introduction of such a fashion line would help M&S to get a bigger market share.
Technological
Mark and Spencer have strong online as well as social media presence. Thus, in this context, the company well placed for capitalizing in this avenue. Moreover, the consumers prefer online retailing and mobile commerce compared to store purchases since more focus lies technologically (8). Thus, it is very important for Mark and Spencer to have a substantial presence in the digital medium so that they can reap the benefits.
Environmental
M&S has a Plan A that focuses on the 180 commitments that the company has put forward in dealing with the natural and environmental issues. Thus, M&S thus looks forward to capitalize on the success of Plan A (9). However, for stricter regulations on the environment and increasing pressures on the customers on the ethical green practices would require strict standards at M&S. M&S however takes advantage of this development through its concern for the environment.
Legal
Consumer rights, environmental, antitrust, legal factors, health and safety regulations affect the company. However , the company’s initiative of ‘behind the barcode’ ensure omni channel presence experience by allowing consumer to place online orders for home delivery or allow store pick up. Legal plan however needs to be stronger for the company (Fernie and Sparks 2014). This is because the operation of M&S does not create obstruction to any regulation or law in international, home and the countries that is lies along its value chain. Thus, the legal environment of the company as well the legal department became important during the allocation of the new sites for the stores at the British petrol station.
Porter’s value chain analysis represents a strategic tool used for identification of the activities close to or in an organization that leads to creation of the service or product. The three primary activities however include:
Inbound Logistics
Inbound logistics deals with the delivery, storage and transport of the goods that is coming into the business. The launch of Plan A of Mark and Spencer and having won an award for implementation of a disruptive supply chain have placed the company far ahead of the competition in terms of the environmental and social impact of its business(Potter et.al 2016). The 180 commitments are supported by financial incentives since the buying teams includes energy efficiency, ethical trade, sustainable sourcing and making the company the sustainable retailer of the world. The company has also reduced its initial dependency on the vendor’s full service. The company took this initiative by launching a warehouse consolidation program. The company opened up its brand new warehouse at Bradford where it combines the food suppliers from the all the four centers. The company also plans in building a second warehouse in East Midlands that will ensure providing e-commerce facilities along national distribution centre (Crocker, Jessop and Morrison 2012). This helps the company in possessing greater control over the supply chain. The company expected for sourcing about sixty-five percent of the inventories from the direct vendors.
Operations
Mark and Spencer has made a multitude of investment in sub brands like store bakeries and an enhanced in store customer feel thereby keeping up to the changing customer needs. The company in the year 2014 to 2015 underwent difficulties while managing its distribution and operations online from one of its centre (Yu, Ramanathan and Nath 2014). This gave rise to cancellation of delayed orders. The company also arranged for an information technology (IT) system and logistics network for ensuring better flexibility of the supply chain and availability of the customers. However, towards the end of 2015 the company had to shut down its website temporarily due to breach of security. There is still prevalence of poorly integrated IT systems experienced by the company. Apart from this, the M&S for satisfying the customer needs also established sub brand based products. Further, the company also tried to launch in store bakery for maintaining the freshness of delivery to the customers. The company also adopted modern techniques for improving the store atmosphere and make the shopping experience more inspiring.
Outbound Logistics
Outbound logistics focuses on the delivery, storage and transport of goods that is going out the business. There are however numerous stages of the outbound process of logistics that business or organizations go through (Hadjiconstantinou 2012). For effective working of the outbound logistics, the sales section first obtains a customer order that it confirms with the inventory records for ensuring completion of the order. The order then is transferred to the warehouse for packing and picking after which it is shipped. Following the process, there is billing against the customer order followed by cash collection. In this context, M&S have multiple operation channels that allow flexibility to the customers for placing orders, shop online and ensure them with seventeen delivery options (Christopher 2016.). From the year 2010, the company has put forward an accelerated program by ensuring a more supply chain through targeting a saving of 280 million dollar by the year 2020. The company has closed its smaller warehouses and opened up larger ones. The company has however set the annual targets of recycling in the year 2009 and in the year2 012 the company achieved a zero waste for landfill. Thus, M&S possess a variety of channel for operation that put forward flexible range of delivery and order options. Moreover, the company also tries to provide convenience in service through online shopping facilities and ensuring delivery options on the following day.
The deployment of information technology has helped Mark and Spencer (M&S), the leading retailers of United Kingdom, in improving its operational efficiencies, effectiveness of business drive and helped in providing superior experience to the customers (Mithas et.al 2014). The information technology also helps in providing end-to-end infrastructure management services and integrated applications for M&S thereby helping it in supporting critical applications that is spanning multiple lines of functional and business areas including procurement, supply chain, forecasting, stock replenishment, financial management and sales.
The introduction of information technology will enable M&S to deliver efficient services and thereby help in achieving better positive outcomes in future. The intrusion of new generation of consumers brings about the change in the ways of fulfillment and expression of consumer demand and preferences along with the perception of the brand value and the product benefits. This had ensured an increased in the visualization and globalization of the business and technology architectures that are contributing to the change in retail landscape (Recker 2012). The introduction of information technology helps M&S in embracing the business processes and new technologies for strengthening the leadership position and operates as a multi channel retailer and at the same time lead to expansion of the international business. The application of information technology helps M&S to increase the company’s ability in responding to evolving marketplace through increase efficiency and speed. In addition, with technology M&S facilitated to analyze and collect customer data with a differentiation. Further, the company is also able to work effectively through improving its business processes. Thus, the commencement of technology can lead to improvement in business processes by speeding it up and ensure cost saving benefits.
Thus, the rise in the information technology has made a way for varied innovations. The digitization of the information has enabled an increasing number of businesses to use the digital tools in improving the prospects of the business. Therefore, information technology has provided business with the scope of analyzing data and plan business strategies (Österle 2013). The usage of information technology ensured that the analysis of data was not only accurate but it also helped in optimizing profits. Thus, with information technology M&S can have the following transformation in its business processes:
The introduction of the information technology helps in automating the business process of M&S. This will not only help in reduction of the operation cost but also helps in saving time. The saved time can help the company focus on other tasks that in a way helps in speeding up the business process of the company. With information technology, M&S can automate processes like collection of customer data, tracking of metrics and billing. This can however be achieved using various automation software.
Like every organization, M&S have a huge database that comprises of information related to business transactions and client details. This information holds extreme importance and results in a host of legal issues in case of loss. In such scenario, information technology can be of great help as it provides the right resources for storing the information in a manner that ensures protection at a maximum level. This is because virtual storage systems can ensure information safety by allowing limited access. Moreover, these storage systems have increased protection so they can neither be hacked nor wiped off.
Information technology also will enable M&S to ensure enhanced customer satisfaction and experience. The key to which is to cater to the customer requirements and ensuring a strong customer support team. Information technology thus ensures providing the best tools for solving customer problem and communicating with them on a real time basis. The technology has brought to the customer’s facilities like emailing and various social media platforms.
Managing resources sometimes becomes quite difficult for the M&S. This is when the information technology plays a key role in ensuring effortless management of the resources through introduction of various feasible solutions.
Conclusion
The report ends with a discussion on the impact of information technology on the business process of Mark and Spencer (M&S). There is also an analysis of primary activities of the company in regard to the Porter’s value chain. The report also puts forward a PESTEL analysis of the company. There is also a brief introduction of the company, its products and services and the business strategy adopted by the company.
References:
Barrientos, S., 2013. Corporate purchasing practices in global production networks: A socially contested terrain. Geoforum, 44, pp.44-51.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Corporate.marksandspencer.com. 2017. Home. [online] Available at: https://corporate.marksandspencer.com/?intid=gft_company [Accessed 10 Nov. 2017].
Crocker, B., Jessop, D. and Morrison, A., 2012. Inbound logistics management. Pearson Higher Ed.
Fernie, J. and Sparks, L., 2014. Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan page publishers.
Hadjiconstantinou, E. ed., 2012. Quick response in the supply chain. Springer Science & Business Media.
Marksandspencer.com. 2017. Store Listing | M&S. [online] Available at: https://www.marksandspencer.com/s/store-listing [Accessed 10 Nov. 2017].
Marksandspencer.com. 2017. Welcome to Marks & Spencer. [online] Available at: https://www.marksandspencer.com/ [Accessed 10 Nov. 2017].
Mithas, S., Tafti, A.R., Bardhan, I. and Goh, J.M., 2012. Information technology and firm profitability: mechanisms and empirical evidence.
Mohamed, M.E.J.R.I. and Daniel, D.W., 2012. Analysis of retailers’ communication approaches in sustainability and social responsibility reports. International Journal of Marketing Studies, 4(2), p.30.
Österle, H., 2013. Business in the information age: heading for new processes. Springer Science & Business Media.
Potter, A., Lalwani, C., Disney, S. and Velho, H., 2016. Modelling the impact of factory gate pricing on transport and logistics. In Developments in Logistics and Supply Chain Management (pp. 231-239). Palgrave Macmillan UK.
Raynolds, L.T., 2012. Fair Trade: Social regulation in global food markets. Journal of Rural Studies, 28(3), pp.276-287.
Recker, J., 2012. Introduction. In Scientific Research in Information Systems (pp. 3-10). Springer Berlin Heidelberg.
Thompson, J. and McLarney, C., 2017. What Effects will the Strategy Changes Undertaken by Next Plc Have on themselves and their Competition in the UK Clothing Retail Market?. Journal of Commerce and Management Thought, 8(2), p.234.
Yu, W., Ramanathan, R. and Nath, P., 2014. The impacts of marketing and operations capabilities on financial performance in the UK retail sector: A resource-based perspective. Industrial Marketing Management, 43(1), pp.25-31.
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