Marks And Spencer Business Strategy Essay

1076 words - 4 pages

Business strategy is the means by which firm’s plans to achieve its goals and objectives. It can also be termed as organization long-term planning. The strategy covers periods between 3-5 years and sometimes longer. Businesses use two major types of strategy, general or generic and competitive strategies. The overall strategy involves strategies of growth, globalization and retrenchment. The competitive advantage includes low pricing, product and customer differentiation. We will look at the business strategy used by Marks and Spenser (Cole, 1997). The company is a British multinational located at Westminster London and specializes in clothes and luxurious food products.
The alternative strategies relating to substantive growth, limited growth or retrenchment for marks and Spenser.
Substantive growth
Marks and Spenser alternative for the substantive growth can take the following strategies, horizontal integration, related diversification, vertical integration and unrelated diversification.
Horizontal and vertical integration
In the horizontal integration, the company product range is from a wide clientele. That is they sell product either clothing or luxurious foods from different manufacturers. These give them the edge since the products they offer a variety for the customers to choose from, and hence they can shop less than one roof (Cole, 1997). In the vertical integration strategy, the firm will deal substantial with products from a single supplier and M&S gets the exclusive rights to deal with the product and its supply to the market. This is necessary when the company aim is to serve an identified target market which is exclusive and has the potential to sustain and grow the company substantively. These employ a targeted approach, as opposed to the horizontal integration which focus is to serve a wide
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market. The vertical integration targets markets that are willing to pay a premium for products.
Related and unrelated diversification
Diversification refers to businesses offering products that are different in use, manufacturers and scope. The related diversification involve offering products that are related or acts as substitutes for one another. While the unrelated diversification is where the company diversifies in completely unrelated products. The strategy used by M&S is both as its products are both related and unrelated. In the unrelated strategy, the company is involved in both the clothes and food which are not related. The related is both in the food and clothing lines. The company offers food from different suppliers that are competing with each other and also the same is in the clothing products, in the business. The company also aims at diversifying into new markets with china and India been the targets because of their high growth economic rates and overall political stability. The company is also planning on diversifying into the housing sector especially in china and has set aside a huge amount...

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