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

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

Business is presently one of the biggest 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 infants and reduce death rate.
Business is now a global business. Unlike other multinational business, it has senior executives from different countries and attempts to make decisions considering the whole 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 countries.


The function 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 supplying healthy food. It wishes to help the world in forming a healthy and much better future for it. It likewise wishes to encourage individuals to live a healthy life. While making certain that the business is prospering in the long run, that's how it plays its part for a better and healthy future


Marks Spencer And Zara Process Competition In The Textile Apparel Industry's vision is to supply its consumers with food that is healthy, high in quality and safe to consume. It wants to be innovative and concurrently understand the requirements and requirements of its clients. Its vision is to grow quickly and offer items that would please the requirements of each age. Marks Spencer And Zara Process Competition In The Textile Apparel Industry envisions to develop a trained workforce which would help the business to grow


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


Marks Spencer And Zara Process Competition In The Textile Apparel Industry has a wide range of products that it uses to its consumers. In 2011, Business was noted as the most gainful company.

Goals and Objectives

• Remembering the vision and mission of the corporation, the business has put down its goals and goals. These goals and goals are noted below.
• One objective of the business is to reach zero landfill status. (Business, aboutus, 2017).
• Another goal of Marks Spencer And Zara Process Competition In The Textile Apparel Industry is to waste minimum food during production. Frequently, the food produced is squandered even prior to it reaches the customers.
• Another thing that Business is dealing with is to enhance its packaging in such a way that it would help it to reduce those problems and would likewise ensure the shipment of high quality of its items to its customers.
• Meet worldwide standards of the environment.
• Construct a relationship based upon trust with its consumers, business partners, employees, and federal government.

Critical Issues

Recently, Business Business is focusing more towards the strategy of NHW and investing more of its profits on the R&D technology. The nation is investing more on acquisitions and mergers to support its NHW strategy. However, the target of the business is not accomplished as the sales were expected to grow greater at the rate of 10% annually and the operating margins to increase by 20%, given in Exhibit H. There is a need to focus more on the sales then the development technology. Otherwise, it might lead to the decreased income rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business strategy is based on the principle of Nutritious, Health and Health (NHW). This technique deals with the concept to bringing change in the client preferences about food and making the food things healthier concerning about the health issues.
The vision of this strategy is based on the secret method i.e. 60/40+ which just means that the products will have a score of 60% on the basis of taste and 40% is based upon its dietary worth. The items will be manufactured with extra nutritional worth in contrast to all other items in market gaining it a plus on its nutritional material.
This technique was embraced to bring more delicious plus nutritious foods and drinks in market than ever. In competitors with other companies, with an intention of retaining its trust over consumers as Business Business has gained more relied on by clients.

Quantitative Analysis.

R&D Spending as a percentage of sales are declining with increasing real quantity of costs reveals that the sales are increasing at a higher rate than its R&D spending, and permit the company to more spend on R&D.
Net Earnings Margin is increasing while R&D as a percentage of sales is decreasing. This sign also shows a green light to the R&D spending, mergers and acquisitions.
Debt ratio of the company is increasing due to its costs on mergers, acquisitions and R&D development instead of payment of financial obligations. This increasing debt ratio present a danger of default of Business to its investors and could lead a decreasing share rates. In terms of increasing financial obligation ratio, the firm must not invest much on R&D and must pay its existing debts to reduce the threat for investors.
The increasing danger of financiers with increasing debt ratio and decreasing share rates can be observed by huge decline of EPS of Marks Spencer And Zara Process Competition In The Textile Apparel Industry stocks.
The sales growth of business is likewise low as compare to its mergers and acquisitions due to slow understanding structure of customers. This sluggish growth also hinder business to more spend on its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of estimations and Graphs given up the Exhibits D and E.

TWOS Analysis

TWOS analysis can be utilized to obtain various strategies based upon the SWOT Analysis offered above. A short summary of TWOS Analysis is given in Exhibition H.

Strategies to exploit Opportunities using Strengths

Business ought to introduce more ingenious items by large amount of R&D Spending and mergers and acquisitions. It could increase the market share of Business and increase the revenue margins for the company. It could also offer Business a long term competitive advantage over its rivals.
The worldwide expansion of Business should be focused on market recording of developing nations by growth, bring in more clients through consumer's loyalty. As developing nations are more populous than industrialized countries, it could increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisMarks Spencer And Zara Process Competition In The Textile Apparel Industry should do cautious acquisition and merger of companies, as it could impact the client's and society's understandings about Business. It should get and combine with those business which have a market reputation of healthy and healthy companies. It would enhance the understandings of customers about Business.
Business must not just spend its R&D on innovation, rather than it should also concentrate on the R&D costs over assessment of expense of different healthy items. This would increase cost efficiency of its products, which will lead to increasing its sales, due to declining rates, and margins.

Strategies to use strengths to overcome threats

Business ought to move to not just developing but also to developed countries. It needs to expand its circle to numerous countries like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

It needs to obtain and combine with those nations having a goodwill of being a healthy company in the market. It would also allow the company to use its prospective resources effectively on its other operations rather than acquisitions of those organizations slowing the NHW technique development.

Segmentation Analysis

Demographic Segmentation

The group division of Business is based on 4 factors; age, gender, earnings and profession. For example, Business produces numerous products associated with infants i.e. Cerelac, Nido, etc. and associated to adults i.e. confectionary items. Marks Spencer And Zara Process Competition In The Textile Apparel Industry items are quite economical by nearly all levels, but its significant targeted clients, in regards to income level are middle and upper middle level consumers.

Geographical Segmentation

Geographical segmentation of Business is composed of its presence in nearly 86 countries. Its geographical division is based upon 2 primary elements i.e. average income level of the consumer as well as the environment of the area. Singapore Business Company's division is done on the basis of the weather of the area i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic division of Business is based upon the character and life style of the consumer. Business 3 in 1 Coffee target those clients whose life design is quite busy and do not have much time.

Behavioral Segmentation

Marks Spencer And Zara Process Competition In The Textile Apparel Industry behavioral segmentation is based upon the attitude understanding and awareness of the consumer. For example its extremely healthy items target those clients who have a health mindful attitude towards their consumptions.

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

In order to sustain the brand name in the market and keep the customer intact with the brand, there are 2 alternatives:
Option: 1
The Company should invest more on acquisitions than on the R&D.
1. Acquisitions would increase overall possessions of the business, increasing the wealth of the company. Costs on R&D would be sunk expense.
2. The company can resell the obtained units in the market, if it stops working to execute its strategy. Amount spend on the R&D might not be restored, and it will be thought about completely sunk cost, if it do not give possible results.
3. Investing in R&D offer sluggish development in sales, as it takes long time to present a product. Acquisitions supply fast results, as it offer the business already established product, which can be marketed quickly after the acquisition.
1. Acquisition of company's which do not fit with the company's worths like Kraftz foods can lead the business to face misunderstanding of customers about Business core worths of healthy and nutritious items.
2 Large spending on acquisitions than R&D would send out a signal of company's inadequacy of developing ingenious products, and would lead to customer's frustration also.
3. Large acquisitions than R&D would extend the product line of the company by the items which are already present in the market, making company unable to present brand-new innovative products.
Alternative: 2.
The Company needs to invest more on its R&D instead of acquisitions.
1. It would allow the business to produce more ingenious products.
2. It would supply the company a strong competitive position in the market.
3. It would allow the business to increase its targeted customers by presenting those products which can be used to a completely brand-new market sector.
4. Innovative products will offer long term benefits and high market share in long run.
1. It would reduce the revenue margins of the business.
2. In case of failure, the entire costs on R&D would be considered as sunk cost, and would impact the business at big. The threat is not in the case of acquisitions.
3. It would not increase the wealth of business, which could offer a negative signal to the financiers, and could result I decreasing stock costs.
Alternative 3:
Continue its acquisitions and mergers with substantial costs on in R&D Program.
Vrio AnalysisPros:
1. It would enable the company to introduce brand-new ingenious items with less danger of converting the spending on R&D into sunk cost.
2. It would offer a favorable signal to the investors, as the total possessions of the business would increase with its considerable R&D spending.
3. It would not affect the revenue margins of the company at a large rate as compare to alternative 2.
4. It would offer the business a strong long term market position in terms of the business's total wealth along with in regards to ingenious products.
1. Risk of conversion of R&D spending into sunk cost, higher than alternative 1 lower than alternative 2.
2. Threat of misunderstanding about the acquisitions, greater than alternative 2 and lower than alternative 1.
3. Introduction of less number of ingenious 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 actually remained the top market gamer for more than a decade. It has actually institutionalised its strategies and culture to align itself with the market modifications and client habits, which has ultimately permitted it to sustain its market share. Though, Business has actually developed considerable market share and brand identity in the metropolitan markets, it is recommended that the business ought to concentrate on the backwoods in regards to developing brand commitment, awareness, and equity, such can be done by developing a particular brand allotment method through trade marketing methods, that draw clear difference between Marks Spencer And Zara Process Competition In The Textile Apparel Industry products and other competitor products. Marks Spencer And Zara Process Competition In The Textile Apparel Industry should leverage its brand name image of safe and healthy food in catering the rural markets and also to upscale the offerings in other categories such as nutrition. This will allow the business to establish brand name equity for freshly introduced and already produced items on a greater platform, making the reliable usage of resources and brand name image in the market.

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

PESTEL Analysis
Governmental assistance

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

Introduction of E-marketing.
No such effect as it is favourable. Concerns over recycling.

Use of sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Greatest considering that 2000 Highest possible after Company with less development than Organisation 8th Cheapest
R&D Spending Highest since 2001 Highest possible after Organisation 5th Most affordable
Net Profit Margin Highest possible because 2005 with rapid growth from 2003 to 2017 Due to sale of Alcon in 2015. Nearly equal to Kraft Foods Incorporation Virtually equal to Unilever N/A
Competitive Advantage Food with Nourishment and also health variable Greatest variety of brand names with lasting practices Largest confectionary and refined foods brand on the planet Largest milk items and bottled water brand on the planet
Segmentation Middle and top middle degree customers worldwide Specific customers together with family group All age and Earnings Client Teams Center and upper middle level customers worldwide
Number of Brands 7th 4th 8th 1st

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 55922 137912 379596 813681 522246
Net Profit Margin 3.82% 6.11% 85.41% 2.22% 17.52%
EPS (Earning Per Share) 55.69 3.96 5.55 8.33 85.12
Total Asset 152181 643493 828632 628735 66539
Total Debt 62337 64478 96282 56782 22498
Debt Ratio 84% 57% 32% 47% 27%
R&D Spending 4795 5719 3554 7796 7434
R&D Spending as % of Sales 5.62% 5.99% 3.12% 7.41% 1.82%

Executive Summary Swot Analysis Vrio Analysis Pestel Analysis
Porters Analysis Recommendations