Value Chain Analysis of Mark & Spencer (M&S)

The value chain analysis forces strategist’s to think from perspective of organizational activities. The primary activities are those concerned with creation or delivery of service or product and include inbound logistics, operations, outbound logistics, Marketing and sales and services.

Inbound logistics

Traditionally inbound logistics are activities that are concerned with receiving, storing and distributing the inputs that go into creation of product and services. M&S won the GBS supply chain award and has further significant lead because of its Plan A sustainability program to create step changes in its global supply chain. M&S has also received commendation from EC which gave it European Business Award for the Environment. M&S thus a stronghold on sustainability which should it a major advantage over its competitors.

Operations

M&S is working on improving customer experience and as per its 2016 annual report it would be working towards increasing customer visits and spend through “Inspiring and effortless experience” and to provide customer that kind of experience is what  store teams are trained and rewarded for. There have been hiccups in managing online operations when hi-tech distribution centre in Castle Donington had problems leading to 2% decline in sales on M&S.com (Butler, 2015). M&S is investing in upgrading its IT systems so it can provide better supply chain management. There was also a glitch leading to 800 online customers’ personal details getting leaked and while M&S claimed that no financial data was leaked the incident showed lack of appropriate controls

Outbound Logistics

Outbound logistics are concerned with collection, storing and distribution of product and services to the customers. M&S works with in-store shopping as well as shopping through home catalogue, online shopping and click and collect options. M&S continues to invest in warehousing and they recently acquired warehouse in Bradford which would serve as an automated store National Distribution Centre (NDC) for the clothing and home business Further M&S is also focusing on merging smaller warehouses to make supply chain and distribution more efficient.

Marketing and Sales

Marketing and sales help in making customer aware of the product and convince the customer to purchase the product or service. Digital division M&S venture lab works with lean start up technologies to improve shopping experience for the customers. Multi-channel experience allows customers to seamlessly shop using mobile, online, catalogue or through visit in-store. 60% of all online sales are still picked up in store showing that people still prefer in-store experience. Digital experience is enhanced and customer engagement increased through engagement via multi social media platforms. M&S also engages in high impact promotions using customer loyalty data to enhance value for customers.

Service

Service aspect includes all of those activities that would enhance and/or maintain product’s value. M&S has realized that to maintain customer loyalty “offering great customer service is absolutely crucial to maintaining customer loyalty”A hallmark of the priorities for 2016 were maximizing product availability and its speed of delivery to customers. Further M&S has also made delivery free for orders above £50 orders besides adding free returns by post for up to 35 days after purchase. M&S is also works on increasing space for food halls and reclaim area from clothing and fashion. Marks & Spencer has begun a trial scheme to increase the size of its food halls and cut back on the space it devotes to fashion