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Was withdrawal the only recourse for the financial problems faced by Marks & Spencer?

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  1. Introduction
  2. Explanation, in general, the performance of L'Oreal
  3. The value chain
    1. Support Activities
    2. Main activities
  4. The Porter's five forces
    1. The bargaining power of suppliers
    2. The bargaining power of customers and distributors
    3. The rivalry between existing competitors
    4. The threat of new entrants
    5. The threat of substitute products
  5. The key success factors
    1. SBU: Consumer Products
    2. SBU: Professional Products
    3. SBU: Luxury
  6. The competitive position
  7. SWOT model
    1. Diagnosis of internal strengths and weaknesses of L'Oreal
    2. Analysis of opportunities and threats affecting the company
    3. Deepening of the external diagnosis according to the 5 forces of Porter
    4. The main strengths, weaknesses, opportunities and threats
    5. SWOT grid proposals
  8. The Human Resources Department at L'Oreal Description of the organization of the HR function The key points of the HR policy for L'Oreal:
    1. Recruitment
    2. Training
  9. Strategy, culture and fashion animated men
  10. Strategies
    1. A differentiation strategy
    2. A vertical integration strategy
    3. A diversification strategy
  11. The structure
    1. The operational center
    2. The strategic apex
    3. The strategic Technostructure
    4. Logistics support functions
  12. Corporate culture
    1. Different sources of cultures
    2. Culture in the service of the company
    3. Ethics, Values and Principles
    4. Managing Diversity at L'Oréal
  13. The animation of men
    1. The authority
    2. Influence of the orientation leaders
    3. L'Oréal and adhocracy
    4. Background
    5. Description of features of the structure adhocratic found for L'Oreal
  14. Study of the Management Development Center
  15. Strengths and weaknesses of the MDC Latin America
  16. Recommendations
  17. Conclusion

Marks & Spencer is a UK-based distributor of cosmetics, clothing, household items and food. M&S was at the top in sales and was growing at a steady pace. Then, things changed and the sales decreased.

The sales that were booming once became endlessly slow. The situation of Marks & Spencer has been deteriorating since 1994, when sales began to decrease. It was between 1997 and 1998 that the sales began to stagnate. The turnover of the firm decreased, but the cost of employees and other expenses remained stable.

Hence, the profitability of M&S collapsed. The shareholders of M&S stocks, who hold about 2,267,225,795 shares in major stock exchanges in London, Paris, Amsterdam, Brussels, Frankfurt started complaining for various reasons. The stock price was high and the rate of return from the company was low. The rate of return which was 15% in 1997, decreased to 5% in 1999. The shareholders were very displeased and demanded that the distribution of dividends on the rate of return be made 15% again.

This situation landed M&S into further trouble as the dividend distribution would exceed the net profit of the company. The shreholders refused to budge, and expected 33% equity, which represented 6.5% interest, which would be £2 billion, or an annual interest of 17%. To meet the shareholders' requirements, the company had to find a way to increase its financial return and react quickly, knowing that these demands were difficult to be fulfilled.

Competition from M & S is present at three levels, at the employees level where there are several employees unemployed for the same position. Battle between the different companies to get more capital, in enterprise where there is business competition which grow to increase productivity and profitability.

In women's fashion business Spanish Zara and Sweden's H & M have established themselves as brands of ready-made, trendy and at affordable prices have eclipsed M&S. The company reacts according to a strategic approach.

A strategic approach is a process used to solve problems in business through four phases. The first phase where strategic analysis examines the environment, organization, company resources to identify strengths and weaknesses of the company. The second phase is the development and selection of projects to be implemented. This is followed by the implementation of the decisions taken and finally the monitoring, assessing of alternatives.

Faced with these problems, M & S decides to fall back on its homeland Britain, where the company's work and business remains the most profitable, in order to redress the balance and prepare for a better future. After the arrival of French Luc Vandevelde as head of the firm, M&S has decided to close all its stores in continental Europe taking a drastic measure in order to revive its business.

Tags: Marks and Spencer, decline in sales, strategies taken for revival,

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