M+S Team Project 3

8/6/2019 M+S Team Project 3

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Team Project: A Company Profile


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Company Overview

M&S is one of the leading clothing and foodretailers in the UK.

Founded in 1894 by Michael Marks and

Thomas Spencer.* There are over 600 stores in the UK, and over

300 abroad.*

The companys chairman is Sir Stuart Rose,and the chief executive is Marc Bolland.


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Industry perspective

M&S work in the retail industry including

financial services.

We are one of the UKs leading retailers, withover 21 million people visiting our stores each

week. We offer stylish, high quality, great

value clothing and home products, as well as

outstanding quality foods, responsibly sourced

from around 2,000 suppliers globally. http://corporate.marksandspencer.com/aboutus/company_overview


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Main Competitors

Mark and Spencer has a clear lead over all itsmajor competitors in the key areas of

quality, fit, trust, breadth of range andsatisfying customer service.

http://www.stockopedia.co.uk/content/marks-spencer-group-18540/


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Marks and Spencer Performance

At the top of there industry

First British retailer to make a pre tax profit of

1 Billion (1998), achieved also in 2008

Recession Hit Hard

Crisis in 08/09 Restructuring programme

introduced

Enjoyed Boom years, 06/07/08

Financially, the best year in the last 5 was

2008 with profits of 821 millionwww.marksandspen

cer.com

www.digitallook.com


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Profits Graph showing

profits after tax

0

100

200

300

400

500

600

700

800

900

2006 2007 2008 2009 2010

Profits (m)

Profits ( m )

M & S took a big hitduring recession

I

n 2009 Profits weredown 315

million, thats 38% down

from 2008

Had great years leading

up to recession, profits

jumped 300 million in 2

years

www.wikipidea.com

www.guardian.co.uk


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Net profit Margin

0

2

4

6

8

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12

14

16

2006 2007 2008 2009 2010

Net profit margain %

Debenhams Profit

Margain %

Graph illustrating net

profit margin of M&S

and Debenhams over

last 5 years

Both companies enjoyed

years leading up to

recession

Debenhams profits

started to decline 2007www.reuters.com


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Average Share Price

Current Share price 371.4p

Average shares over the last year shownin the graph

0

50

100

150

200

250

300

350

400

450

Jan Feb Mar Apr May Jun Jul Aug Sept Oct

Averag

eShar

ePric

e(p)

Average Share Price (p)

www.sundaytim

es.com


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International Revenue

0

200

400

600

800

1000

1200

2006 2007 2008 2009 2010

International Revenue ( million)

Revenue ()

International revenuemassive

295 stores abroad

Revenue still on therise despite recession

Biggest InternationalStore is in Dubai

www.guardian.co.uk

www.reuters.com


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ROCE

ROCE: Return on capitalemployed

ROCE is used to provethe value the businessgains from its assets andliabilities

Formula: EBIT / capitalemployed

Capital Employed:Operating income Operating Expenses +Non operating income

EBIT: Earnings before interest and tax

Capital Employed: Operating income

Operating Expenses + Non operating

income

0

5

10

15

20

25

2006 2007 2008 2009 2010

ROCE %

ROCE %


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Management Structure

In the recent past M&S have changed their managementstructure in its entirety.

Initially going from what was a much layered structure andchanging then to a flatter structure through the process ofde-layering.

With this new format M&S will have a larger amount ofindividuals in higher management positions with moreresponsibilities than they had previously.

This move in structure will allow M&S make sharp andconcise business decisions.

M&S employ 68,208 staff. With 60,000+ in the UK and afurther 5,000+ in overseas branches. A considerableproportion of these employees are in management roles.


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Sir Stuart Rose(Chairman)

Started in retail in 1972 at M&S.

Became chairman in June 2008, after being re-appointed to M&S in 2004 as chief executive.

Has worked for M&S for 23 years in total out of his 38 year career inretail.

Rose moved from M&S to the Burton group in 1989, where heworked for five years before becoming their chief executive in 1994.

He then left The Burton group in 1997 after the companiesdemerger.

He went on to be chief executive at Argos, Booker and Arcadia

group plcs between 1998 2002 before re-joining M&S in 2004 aschief executive.

Rose is planning to stand down in January 2011, due to personalreasons


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Marc Bolland

(chief executive) Only very recently appointed in may 2010, appointed to chief

executive role.

Began his career at Heineken NV based in Holland in 1987 where heworked in many different roles throughout his 8 years there.

He worked in many different marketing and sales roles until he wasappointed as managing director for the companies Slovakia base in1995.

In 1999 he moved to the managing director role for Heinekenexport worldwide, before being put on the operating board in 2001.

His final move at Heineken saw him go into the chief operating

officer role in 2005. Leaving Heineken in 2006 he joined Morrisons as their new chief

executive.

He is currently the relatively new chief executive at M&S.


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Products and Services

Marks and Spencer sell a range of different

products.

The company is one of the leading clothesmanufacturers in the UK.

M&S also sell a large range of food, which is

mostly produced by the company.


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Although M&S most commonly produce

clothing themselves, there are also a number

of exclusive brands available, includingAutograph, Blue Harbour and Per Una.http://en.wikipedia.org/wiki/List_of_Marks_%26_Spencer_brands

The company started selling 400 major foodand drink brands about a year ago, including

Coca Cola and Kelloggs.http://news.bbc.co.uk/1/hi/8341625.stm

Every year, M&S look toredevelop its products

and launch new ones.


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Marks and Spencers market share of clothing

currently stands at 12%.http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article7086761.ece

This includes increases in sales of

Mens, womens and childrens clothing.

However, the companys market share of foodsales decreased slightly, to 3.8%.http://corporate.marksandspencer.com/file.axd?pointerid=4c3503b3174c4d0b88726892d8ea1493&versionid=8de6c90cfce

d4676b04aad0d8a19e41b

M&S Energy grew in terms of customernumbers, to almost 300,000 people.http://corporate.marksandspencer.com/file.axd?pointerid=4c3503b3174c4d0b88726892d8ea1493&versionid=8de6c90cfced4676b04a

ad0d8a19e41b


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Marks & Spencers CustomersThe Core Customer

Retail customers, B2B virtually insignificant.

35+ aspiring middle class

Female bias

Ageing and will inevitably stop shopping

No longer quite so affluent relying on pension

Why they Buy:

Looking for quality goods at slight extra cost

Not a fashion brand more a classic brand

Customers trust the Brandhttp://www.marksandspencer.com


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Marks & Spencer's Customers

Buying Behaviour

Mark and Spencer's new large stores are based at

retail parks

the New big stores have car parking to cater for thecar driving new customer.

Simply food shops store have been added with 400

stores in the UK for the customer wanting up market

convenience food.

Shops at airports and service stations are for the new

travelling customer.


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Marks & Spencer CustomersSeasonal Customer

New advert for Christmas which makes clear who their

customers are by showing example such as Danni

Minogue, Twiggy and Peter Kay who are 35 plus and

affluent.

They still arent looking to sell to the 20 year old even at

Christmas.

Financial Services

M & S have their own credit cards, customers believe

they are a trustworthy brand so they trusttheir money is safe

http://annualreport.marksandspencer.com


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Marks & Spencer CustomerInternational customers

At the moment 90% of the earnings from customers are in the UK

In 2001 they had 40 stores in major European citys.

These were closed over night.

M&S are now going back into Europe to try again

Online shoppers

Trusted brand

They are looking to expand their online sells by making a big investment in

promoting this aspect of their business.

http://corporate.marksandspencer.com


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M&S Corporate Social Responsibility

Community Projects

M&S partnership with Groundwork anenvironmental charity.

M&S always looking for ways in which theirshops can become more sustainable.

Teaching employees on ways to become more

environmentally friendly

http://www.groundwork.org.uk/what-we-do/major-initiatives/ms-greener-living-spaces.aspx

http://corporate.marksandspencer.com/investors/corporate_governance/governance_framework


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Fair-trade

M&S have a large range of Fair-trade products

from beans to clothes. As of March 2006, Marks and Spencer

converted all the tea and coffee they sell to

Fair-trade.

Marks & Spencer also a large retailer of Fair-

trade clothing. http://plana.marksandspencer.com/we-are-doing/fair-partner/


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Plan A

http://www.youtube.com/watch?v=6s8iiIFgP

MU&feature=channel

Documents

M+S Team Project 3