Supply Chains Networks and Markets Assignment Sample
Introduction
Marks & Spencer, often abbreviated as M&S, is among UK’s largest retailers. The retail sector has more than 21 million consumers, visiting the stores every week. They offer outstanding significance clothing, high-quality as well as excellent food, kitchen items, and high-quality home products.
They procure their goods responsibly from about two thousand suppliers all over the globe. Over 76,000 staff operates at the company in the UK and overseas territories, where the corporation has increasing international business (Aloini et al. 2016). The company’s vision is to be an industry standard among others.
Evaluation of M&S’s supply networks and strategies
The company relied heavily on successful supply chain techniques for the success of the business. Marks & Spencer leads department stores in the UK. The report analyzes the categories of M&S items through concepts of the receptive and productive supply chain. M&S has various supply chain strategies that apply to separate product categories.
M&S intends its supply chain in keeping with consumer needs or requirements as well as product origin. The logistics strategy of the organization is also based upon the origin of the product.
This increases client supply chain efficiency using two supply chain management approaches. Receptive supply chain policy emphasizes the higher level of service and customer response (Bhardwaj and Mahajan 2016).
Locations of inventory are situated near the customer. The explanation for this is to have a constant supply in case of major demand changes. Thus supply chain must be flexible enough to cater to uncertainty. M&S relies on the agility principle by constantly focusing on customer demand.
Global sourcing of items like wine from the country that produces grape is a good move for M&S (Bradley 2016). It offers dedicated supplier-side logistics infrastructure as the origin is the world’s largest wine-producing region. M&S supports the logistics companies of wine that have developed themselves in the countries of Europe.
Moreover, M&S applies a policy of global sourcing for collecting Leather Bags. Indian sourcing is helpful and supports the supply chain strategy of the company. India is the market for high-quality leather goods and cheap labor. M&S, however, gets assurance from the Indian suppliers of dedicated production.
M&S implements the critical color lipstick supply chain strategy responsively. Higher levels of inventory are established at UK store outlets as well as distribution centers for their cosmetics brand.
M&S policy decision on importing Chinese Lipsticks is focused on cost-effectiveness factors (Chang 2016). Additionally, more essential are the prices of the raw materials and comparatively inexpensive labor.
Evaluation of the supply network of the global apparel industry and market
The clothing supply chain is so lengthy and complicated, diligent study and pilot projects have to precede the introduction of full sustainable practices. In a short time, it will not be attainable. A lot of alliances, coalitions as well as organizations around the world will drive sustainable growth.
Only a dedicated paradigm change across the entire planet will avoid environmental degradation. Adequate customer knowledge about processes and products can require producers to pay close attention to sustainability. Governments, organizations, and industries, which establish standards, must collaborate to set regulations and standards (Ghaffarianhoseini et al. 2017).
Supply chains of apparel are often widely dispersed geographically, owing to the sturdy outsourcing of the fashion or apparel manufacturing to regions with low labor costs, especially Asian countries in recent years. The significant rise in global trade in ready-to-wear apparel illustrates this growth.
Global exports for ready-to-wear clothing grew significantly over 1500 percent for the span between 1973 and 2000 that expanded the share of apparel in total foreign trade from 2.0 to 3.0 percent (Gronum, Steen, and Verreynne 2016).
Throughout this sense, fashion suppliers and distributors of the world have and often entirely abandoned their production capacities and adapted their principal activities to integration, preparation as well as coordination throughout geographically dispersed supply chains.
Typical supply chains involve suppliers of raw materials as well as producers of clothes, manufacturing plants in the world, and local purchasing agencies. Suppliers tend to run readymade warehouses for food distribution and storage centers primarily in Europe, serving distributors close to consumers.
Several separate suppliers of logistics cross the geographical gaps and also provide extra services. Retailers and manufacturers are critical selling participants of the clothing supply chains. Moreover, product returns are an integral part of the reverse flow of clothing supply chains (Ilvonen, Jussila, and Kärkkäinen 2019).
Striving at this concept, an optimization design was developed to examine the problem of research in-depth.
Other significant factors influencing fashion logistics are the particular properties of apparel products that are accompanied by significant product variations and rapid technological change, leading to short sales revenue periods and limited supply predictability.
For many of the current different provider or retail chain brands, product lines, and trademarks, a huge proportion of non-interchangeable and custom-tailored products have to be produced, although most of these product lines are often roughly comparable to one another (Klievink, Bharosa and Tan 2016). Fashion apparel items must be supplied in several variants, variety in sizes and colors.
Evaluation of the supply networks of China’s apparel industry and market
The clothing industry is important to China’s economies around the world, making a major contribution to export earnings, domestic employment, and gross domestic product (GDP). The nation has a profitable apparel industry, which is competitive with a strong domestic supply of raw materials, an abundance of low-cost workers, and a traditional emphasis on the textile as well as the apparel sector. Since 2001, China is the world’s leading manufacturer of apparel.
The industry of Chinese apparel has also been gradually developing since the 1950s, along with huge changes occurring from the year 1978, when China opened its markets for foreign investors (Linehan and Fisher 2018).
Since the time being, the government of China has adopted a set of policies to promote foreign direct investments and improve Chinese apparel firms’ competitiveness by encouraging competition while reforming the government-owned entities.
The development progress of the Chinese apparel industry has been commendable, which is beneficial for the companies. However, China’s apparel industry has experienced major changes in the last couple of decades (Mann et al. 2017). As per them, the competitive advantages of cheaper labor and land decline slowly as wages increase that is because of the recent changes.
Low-cost exposure to production in Chinese production inputs includes factors such as capital, labor, raw material, property, etc. The firm that has relatively cheap exposure to some or all of these competitive inputs is much more likely than any of its rivals and competitors to generate low-cost output. Additionally, the technological advantage like computers, machines as well as other technologies helps the Chinese firms lower their expenses. In certain industries such as textiles,
these variations in physical technology between the businesses will generate the necessary cost differential, giving a competitive advantage over others to better technology companies (Morimura, Minami and Nishioka 2016).
China has been seen as the greatest risk to the fashion and clothing industries. China’s share of textile imports to the United States is up by 71 percent, leaving over 630,000 sales forces unemployed. Therefore, the market is dominating and it would be a great decision for the apparel companies to expand their businesses in the markets of China.
The companies of the United States are facing some of their toughest competition from Chinese government-owned firms that regularly lose capital. In trying to compete with China, they not only compete with low wages but also compete with businesses that may not have to generate a profit, according to Nisar, Prabhakar, and Strakova (2019). However, many Asian countries do have cost advantages, capturing the markets of the world.
Task II: Proposed Strategies
Market Positioning Strategy
Getting the items right is essential in the apparel industry. M&S had downturns in business as well as brand image over the past few years connected to its apparel becoming ‘old fashioned’. However, analysts believe they have retrieved; the Chinese market also appears to be repeating product errors. Fashion experts have established key issues that could cause a clothing item to fail (Noe et al. 2017).
Fashion products fail due to poor and outdated designs, poor fit or sizing, irrelevant or unfashionable prints, styles, colors, poor in-store presentation or positioning, poor uncompetitive price or value, product availability or competitive offers, and others.
Every retail chain brand does have its basic design block which was possibly created after analyzing measurements of target groups as well as taking the estimate from that. A typical customer of Marks & Spencer’s apparel is a female after forties who enjoys a comfortable price and fit. This has also affected M&S sizing and fashion.
Consumers complain that M&S clothes, as well as apparel from other shops, are larger than the same sized product. Shrinking measurement into imperceptible 1 cm may allow significant cost reductions in the mass manufacturing of several hundred pieces of clothing (Olnes, Ubacht, and Janssen 2017).
The justification why M&S clothes appear larger than cheaper competitors can be stated by the non-compromising quality philosophy. Chinese fashion industry average measurement is small in each dimension than the usual European size. It is smaller; 2 inches smaller sleeves, sizes up to 16 to 18. In Europe, this is as big as 26.
Thus, when a fashion company steps into a new industry, it is necessary to look into the sizes, culture, and body structure of consumers (Raguseo 2018). Since these items affect the fashion habits of men and the style of clothes. M&S sells large-size apparel on the market of China that delighted expatriates having difficulty finding their size in stores that target Chinese women on average.
Chinese customers have shown very little interest, however, because the outfits are ‘too plain and too big’. M&S is a retail store that aims to satisfy the expectations of various desires of all the age groups. However, as rivals continue to concentrate on one category and one definition of fashion, and thus compete effectively.
The failure of brands to draw the attention of young people of China could be responsible for the failure of positioning everything for the target market in general. Therefore, the company could give its in-house brand independence for exposing several various brands, retaining the name of the store (Rouhani et al. 2016).
Supply Network Strategy
Diversified items bring in a wider and smoother supply chain. Because rivals follow effective and rapid stock production, smaller and quicker stocks, M&S clothing cannot bear the pressure when they get to the shops. Customers might start finding it out of fashion. Managing the supply chain is a critical problem in today’s dynamic business climate. A company’s productivity and profit development significantly rely on its supply chain being handled effectively and efficiently.
In this domain, efficiency not only boosts profitability but it also increases market growth, profit growth, customer satisfaction, brand loyalty, etc. The supply chain must also be handled in such a manner as to enhance customer satisfaction (Thomas, Murphy, and Plant 2018). In the modern business world, therefore, it becomes essential to figure out how companies manage their supply chain to achieve cost-efficiencies when enhancing customer satisfaction.
There must be effective materials control, just-in-time procurement system, modern IT software, and effective supply chain planning, etc. to provide an effective supply chain network system. Material handling covers the tasks required to deliver materials and products to a production plant, including the procurement material costs, through the manufacturing process, and a distribution network to the final consumer.
Enhancing the productivity of the items management feature usually involves the introduction of a distribution program named Just-in-Time ( JIT), which is designed to save on inventory costs by making products appear at a production facility just an opportunity to attend the manufacturing process or just when stock is nearly exhausted (Uhl and Gollenia 2016).
Each year, Marks and Spencer or M&S spend a considerable amount retrofitting their store trading, distribution systems, and supply chain. Other than that its high-tech conveyor system allows efficient cost reduction process.
It also utilizes the routing or scheduling system of logistics technology firm Paragon, which has a ship controller system that connects route coordination with vehicle monitoring through suppliers’ real-time technology of tracking. The software generates route strategies based in Lincolnshire, for the main distribution process of the company (Baker and Saren 2016).
M&S also uses software that provides an early warning when the deliveries are late to avoid the windows of missing deliveries.
Collaboration Strategy
M&S claim that in China they already have adjusted to the styles they sell, there is a tremendous gap in fashion making them more suited for Chinese customers. M&S has several other market penetration tactics they have been using in various countries across the world that could be utilized in China as well. The two approaches they can use are a franchise and joint venture that is an indirect approach for market entry.
A key benefit of these market entry types is that M&S can benefit from the agent or distributor’s local knowledge that they are partnering with. Each of these models could be used inside China, but the most benefits in terms of profit are fully owned entry bars (Prange 2016). This is a big factor for M&S, which would help in gaining profitable insights.
Marks & Spencer is aiming to get the highest value from the brand by franchising the company. The business will have licenses to sell the goods to Chinese investors, and in effect will pursue their assistance in training as well as marketing to guarantee maximizing profits.
The company seeks to sell its items through accumulation in stores throughout China. It is a prudent choice as the business can be convinced of the product quality, something which is not fully guaranteed in other forms of entry modes. However, the company needs to recognize the distribution power level and mark the steps of the channel management process before adopting the strategy completely.
Moreover, the company can also enter the market by adopting another entry mode strategy of a joint venture (Quix 2019). This would help the company to run the business successfully by collaborating with a leading business of China, which in turn will prove to be beneficial.
The initial investment can help the company gain remarkable profits from the new markets of China. Thus, it can be said that collaborating strategies of the company will help in generating more profits. The joint venture will give the company the license to run its stores in the Chinese markets and also help in selling household items or apparel.
Additionally, the company can also adopt an approach of localization, which would greatly help the brand. This is because China is a non-English speaking nation and thus, knowledge of needs, culture, and local language becomes immensely crucial. Hiring local managers, employees, and salespersons would benefit the company as they would be able to communicate with the customers effectively (Piercy 2016).
Task III: Reflection on Theory
Within the retail sector, M&S has a good market position. M&S dominates the women’s wear, men’s wear, and lingerie industry and has a growing sector in the field of children’s wear. M&S is very active in capturing the segment of its consumers through its numerous product ranges, in-store quality, and service of the clothing.
M&S products have an average storage life of three to five days, compared to supermarket shelf items with a shelf life of three to four weeks. It is a strong selling product and thus, cost-conscious individuals worry a lot regarding the expense (Mouzas and Ford 2018).
The strengths of the theories and concepts undertaken are many. It would help the company earn a good market positing in China. Moreover, it would help in improving the reputation of the business. Moreover, the good brand selection and product mix is an advantage of the company, which in turn will prove to be beneficial for the business itself.
Additionally, the company keeps its customers updated with the latest designs and current fashion trends (Olnes, Ubacht, and Janssen 2017). Besides, the company is also up to attractive advertisement strategies and social media presence.
The joint venture strategy of the company would help them bring in good profits and valuable insights. Both sides will acquire valuable experience, know-how, and training. They can leverage the strengths of specialized technologies and each other.
The strategy of a joint venture expands the pool of resources including the money and resources required to accomplish a business target or produce a project that wins. In a joint venture, it is easy to share the risks and expenses of a venture or project (Nisar, Prabhakar, and Strakova 2019).
All parties agree to share costs and cover any reported losses. This avoids a huge responsibility to bear on one faction.
However, with strengths, come weaknesses. If the company does not fix its strategies quite clearly, then it might suffer great challenges while entering the Chinese markets. Moreover, it will also lose its image value or reputation, within the markets of China.
The company might face difficulties while entering the market if proper market research is not done. Additionally, the company needs to conduct a strong marketing strategy before entering any new market for expanding its business strategy. The above report comprises a few strategies, which might help the business succeed in the long run.
A joint venture’s goals are not likely to be 100 percent clear, which are rarely communicated to the involved persons (Noe et al. 2017). There are occasions when a partnership limits flexibility.
Participants need to concentrate on the strategic alliance when that occurs, and the individual companies will suffer in the procedure. For Marks and Spencer, the organizational framework will incorporate the complete transnational network to achieve optimal productivity as well as responsiveness.
A multidimensional system of information can be beneficial in the transition of both consumers as well as business expertise by recruiting local executives. M&S corporate culture should be team-built that would support customers, franchisees, and employees.
M&S must review its international strategy and alter some of its shareholding models with an opinion to gaining and maintaining the international market portion to continue internationalization (Morimura, Minami and Nishioka 2016). Internationally M&S will also have a promising future if it achieves in handling the cultural differences effectively.
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