Menu

Marks Spencer And Zara Process Competition In The Textile Apparel Industry Case Study Help

Case Study Solution And Analysis


Home >> Chicago Booth >> Marks Spencer And Zara Process Competition In The Textile Apparel Industry >>

Marks Spencer And Zara Process Competition In The Textile Apparel Industry Case Study Solution

Business is currently one of the greatest food chains worldwide. It was founded by Henri Marks Spencer And Zara Process Competition In The Textile Apparel Industry in 1866, a German Pharmacist who initially introduced "FarineLactee"; a combination of flour and milk to feed babies and reduce death rate.
Business is now a transnational company. Unlike other international business, it has senior executives from various nations and attempts to make choices considering the entire world. Marks Spencer And Zara Process Competition In The Textile Apparel Industry presently has more than 500 factories worldwide and a network spread throughout 86 nations.

Purpose

The purpose of Marks Spencer And Zara Process Competition In The Textile Apparel Industry Corporation is to improve the lifestyle of people by playing its part and offering healthy food. It wants to help the world in forming a healthy and much better future for it. It also wants to encourage people to live a healthy life. While making sure that the business is succeeding in the long run, that's how it plays its part for a better and healthy future

Vision

Marks Spencer And Zara Process Competition In The Textile Apparel Industry's vision is to provide its consumers with food that is healthy, high in quality and safe to eat. It wants to be ingenious and simultaneously comprehend the requirements and requirements of its consumers. Its vision is to grow quickly and provide products that would satisfy the needs of each age group. Marks Spencer And Zara Process Competition In The Textile Apparel Industry imagines to establish a well-trained labor force which would help the company to grow
.

Mission

Marks Spencer And Zara Process Competition In The Textile Apparel Industry's objective is that as presently, it is the leading company in the food industry, it believes in 'Great Food, Great Life". Its objective is to provide its consumers with a range of options that are healthy and finest in taste. It is concentrated on providing the very best food to its clients throughout the day and night.

Products.

Business has a wide range of products that it provides to its clients. Its products consist of food for babies, cereals, dairy items, snacks, chocolates, food for pet and mineral water. It has around 4 hundred and fifty (450) factories worldwide and around 328,000 workers. In 2011, Business was noted as the most rewarding organization.

Goals and Objectives

• Remembering the vision and mission of the corporation, the business has actually put down its objectives and goals. These objectives and objectives are listed below.
• One objective of the company is to reach absolutely no landfill status. (Business, aboutus, 2017).
• Another goal of Marks Spencer And Zara Process Competition In The Textile Apparel Industry is to waste minimum food throughout production. Usually, the food produced is lost even before it reaches the clients.
• Another thing that Business is dealing with is to enhance its packaging in such a method that it would help it to minimize the above-mentioned problems and would also ensure the delivery of high quality of its products to its customers.
• Meet international standards of the environment.
• Develop a relationship based upon trust with its customers, service partners, workers, and government.

Critical Issues

Just Recently, Business Business is focusing more towards the technique of NHW and investing more of its earnings on the R&D technology. The country is investing more on acquisitions and mergers to support its NHW method. The target of the company is not accomplished as the sales were anticipated to grow higher at the rate of 10% per year and the operating margins to increase by 20%, offered in Exhibition H. There is a requirement to focus more on the sales then the development technology. Otherwise, it may result in the decreased profits rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business strategy is based on the principle of Nutritious, Health and Wellness (NHW). This strategy deals with the idea to bringing modification in the consumer preferences about food and making the food stuff much healthier worrying about the health concerns.
The vision of this technique is based upon the key method i.e. 60/40+ which merely suggests that the products will have a rating of 60% on the basis of taste and 40% is based upon its dietary worth. The products will be manufactured with additional dietary worth in contrast to all other products in market getting it a plus on its dietary material.
This technique was adopted to bring more yummy plus healthy foods and beverages in market than ever. In competitors with other business, with an intent of retaining its trust over customers as Business Company has gotten more relied on by costumers.

Quantitative Analysis.

R&D Spending as a portion of sales are decreasing with increasing real amount of costs reveals that the sales are increasing at a greater rate than its R&D spending, and permit the company to more invest in R&D.
Net Profit Margin is increasing while R&D as a portion of sales is decreasing. This indicator also reveals a thumbs-up to the R&D spending, mergers and acquisitions.
Financial obligation ratio of the business is increasing due to its spending on mergers, acquisitions and R&D advancement instead of payment of financial obligations. This increasing financial obligation ratio position a risk of default of Business to its investors and might lead a decreasing share prices. In terms of increasing financial obligation ratio, the company needs to not spend much on R&D and needs to pay its current debts to reduce the threat for financiers.
The increasing risk of financiers with increasing debt ratio and decreasing share costs can be observed by huge decrease of EPS of Marks Spencer And Zara Process Competition In The Textile Apparel Industry stocks.
The sales development of business is likewise low as compare to its mergers and acquisitions due to slow perception building of customers. This sluggish growth also impede business to more invest in its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Keep in mind: All the above analysis is done on the basis of calculations and Charts given in the Exhibits D and E.

TWOS Analysis


TWOS analysis can be utilized to obtain various methods based upon the SWOT Analysis offered above. A quick summary of TWOS Analysis is given up Exhibition H.

Strategies to exploit Opportunities using Strengths

Business should introduce more innovative items by big quantity of R&D Costs and mergers and acquisitions. It could increase the marketplace share of Business and increase the revenue margins for the business. It could likewise supply Business a long term competitive benefit over its competitors.
The international expansion of Business need to be concentrated on market capturing of establishing nations by expansion, attracting more clients through client's loyalty. As establishing countries are more populous than developed nations, it might increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisMarks Spencer And Zara Process Competition In The Textile Apparel Industry should do mindful acquisition and merger of organizations, as it could impact the client's and society's perceptions about Business. It ought to get and merge with those companies which have a market track record of healthy and healthy business. It would enhance the perceptions of consumers about Business.
Business must not only spend its R&D on innovation, instead of it must likewise concentrate on the R&D spending over evaluation of expense of numerous healthy items. This would increase expense effectiveness of its products, which will result in increasing its sales, due to declining costs, and margins.

Strategies to use strengths to overcome threats

Business should move to not just developing however also to industrialized nations. It needs to expand its circle to numerous nations like Unilever which operates in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

It must acquire and merge with those nations having a goodwill of being a healthy business in the market. It would also enable the business to use its prospective resources efficiently on its other operations rather than acquisitions of those organizations slowing the NHW technique growth.

Segmentation Analysis

Demographic Segmentation

The demographic division of Business is based on 4 factors; age, gender, earnings and occupation. Business produces several products related to children i.e. Cerelac, Nido, etc. and related to adults i.e. confectionary products. Marks Spencer And Zara Process Competition In The Textile Apparel Industry items are quite budget-friendly by nearly all levels, but its significant targeted clients, in terms of earnings level are middle and upper middle level consumers.

Geographical Segmentation

Geographical segmentation of Business is composed of its presence in practically 86 nations. Its geographical division is based upon 2 main elements i.e. average income level of the customer as well as the environment of the region. For example, Singapore Business Business's division is done on the basis of the weather condition of the area i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic segmentation of Business is based upon the character and life style of the client. For instance, Business 3 in 1 Coffee target those consumers whose life style is rather busy and don't have much time.

Behavioral Segmentation

Marks Spencer And Zara Process Competition In The Textile Apparel Industry behavioral segmentation is based upon the mindset knowledge and awareness of the consumer. Its highly nutritious items target those clients who have a health mindful mindset towards their intakes.

Marks Spencer And Zara Process Competition In The Textile Apparel Industry Alternatives

In order to sustain the brand in the market and keep the customer undamaged with the brand name, there are 2 alternatives:
Alternative: 1
The Company should invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total assets of the company, increasing the wealth of the company. However, spending on R&D would be sunk expense.
2. The company can resell the obtained systems in the market, if it fails to implement its method. However, quantity spend on the R&D might not be restored, and it will be considered entirely sunk expense, if it do not offer prospective results.
3. Investing in R&D supply sluggish growth in sales, as it takes very long time to introduce an item. Nevertheless, acquisitions provide quick results, as it supply the business currently developed item, which can be marketed right after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the company's worths like Kraftz foods can lead the business to face misconception of customers about Business core values of healthy and nutritious products.
2 Big spending on acquisitions than R&D would send out a signal of business's ineffectiveness of establishing innovative items, and would lead to consumer's discontentment as well.
3. Big acquisitions than R&D would extend the product line of the company by the products which are already present in the market, making company unable to present brand-new ingenious items.
Option: 2.
The Company should invest more on its R&D instead of acquisitions.
Pros:
1. It would enable the company to produce more innovative items.
2. It would supply the company a strong competitive position in the market.
3. It would make it possible for the business to increase its targeted customers by presenting those items which can be provided to a totally new market sector.
4. Innovative products will provide long term advantages and high market share in long term.
Cons:
1. It would reduce the earnings margins of the company.
2. In case of failure, the entire spending on R&D would be thought about as sunk expense, and would impact the company at big. The danger is not in the case of acquisitions.
3. It would not increase the wealth of company, which might offer a negative signal to the investors, and might result I decreasing stock rates.
Alternative 3:
Continue its acquisitions and mergers with considerable spending on in R&D Program.
Vrio AnalysisPros:
1. It would permit the business to introduce new ingenious products with less danger of converting the spending on R&D into sunk expense.
2. It would supply a positive signal to the financiers, as the total properties of the company would increase with its considerable R&D costs.
3. It would not affect the earnings margins of the business at a large rate as compare to alternative 2.
4. It would provide the business a strong long term market position in terms of the company's total wealth along with in regards to ingenious items.
Cons:
1. Threat of conversion of R&D spending into sunk cost, greater than option 1 lower than alternative 2.
2. Threat of misunderstanding about the acquisitions, higher than alternative 2 and lower than alternative 1.
3. Introduction of less variety of innovative products than alternative 2 and high variety of innovative items than alternative 1.

Marks Spencer And Zara Process Competition In The Textile Apparel Industry Conclusion

RecommendationsBusiness has stayed the leading market gamer for more than a years. It has actually institutionalised its techniques and culture to align itself with the marketplace changes and client habits, which has eventually permitted it to sustain its market share. Though, Business has developed substantial market share and brand name identity in the metropolitan markets, it is advised that the company ought to focus on the backwoods in terms of developing brand loyalty, awareness, and equity, such can be done by producing a particular brand allocation method through trade marketing methods, that draw clear difference in between Marks Spencer And Zara Process Competition In The Textile Apparel Industry items and other competitor products. Moreover, Business should leverage its brand name image of safe and healthy food in catering the rural markets and also to upscale the offerings in other classifications such as nutrition. This will enable the business to develop brand equity for newly introduced and currently produced items on a higher platform, making the reliable use of resources and brand name image in the market.

Marks Spencer And Zara Process Competition In The Textile Apparel Industry Exhibits

PESTEL Analysis
P
Political
E
Economic
S
Social
T
Technology
L
Legal
E
Environment
Governmental support

Altering requirements of global food.
Improved market share.
Changing perception towards much healthier products
Improvements in R&D and QA divisions.

Introduction of E-marketing.
No such influence as it is beneficial.
Issues over recycling.

Use of sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest because 2000
Highest possible after Organisation with much less development than Business 7th Least expensive
R&D Spending Greatest given that 2006 Greatest after Company 2nd Lowest
Net Profit Margin Highest possible because 2006 with quick development from 2004 to 2017 As a result of sale of Alcon in 2013. Almost equal to Kraft Foods Consolidation Almost equal to Unilever N/A
Competitive Advantage Food with Nutrition and health and wellness element Highest variety of brand names with sustainable practices Biggest confectionary as well as processed foods brand name on the planet Largest milk products and also mineral water brand name worldwide
Segmentation Center as well as top middle level customers worldwide Individual consumers along with household team All age and also Revenue Consumer Groups Middle and also top center degree customers worldwide
Number of Brands 7th 9th 3rd 6th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 27132 681445 697527 638971 371326
Net Profit Margin 2.87% 3.79% 22.92% 4.46% 69.34%
EPS (Earning Per Share) 34.15 9.24 3.46 4.65 62.16
Total Asset 363536 739427 826553 449448 25988
Total Debt 92232 38232 23756 55126 68479
Debt Ratio 81% 51% 69% 35% 97%
R&D Spending 5574 1124 6398 1985 2519
R&D Spending as % of Sales 5.69% 4.82% 3.59% 5.86% 9.97%

Marks Spencer And Zara Process Competition In The Textile Apparel Industry Executive Summary Marks Spencer And Zara Process Competition In The Textile Apparel Industry Swot Analysis Marks Spencer And Zara Process Competition In The Textile Apparel Industry Vrio Analysis Marks Spencer And Zara Process Competition In The Textile Apparel Industry Pestel Analysis
Marks Spencer And Zara Process Competition In The Textile Apparel Industry Porters Analysis Marks Spencer And Zara Process Competition In The Textile Apparel Industry Recommendations