Marks And Spencer Business Model: Report On Collaboration With TCS
Question
Task: Students will develop a change management strategy for a real-world client (any business), presented in the form of a business proposal for adoption of a digital solution including a business case for its execution. The submission will draw on insights from case studies and theories of digital innovation and disruptive technologies and processes considered throughout the semester.
Answer
Introduction
In recent years the world of retailing has undergone significant changes as the communication between the physical and virtual world has brought in new opportunities and challenges to the arena of business that was beyond imagination even a decade ago. Following the dot-com crash in 2000, extending retail sector operations into the virtual world and combining most of the channels for sales into one, to provide the customers with an impeccable shopping experience was not at all a feasible idea (Piotrowicz & Cuthbertson, 2014). However in recent years, the idea of retailing using multiple channels ushers in numerous possibilities of growth for the retail sector industries. At present, the retail sector is going through a massive global transformation that further enhances its competitive nature (Piotrowicz & Cuthbertson, 2014). Such a global transformation has only been made possible with the adoption of digital technology within business operations. Majority of the retailers now use multiple channels for commercial activities. The incorporation of a multi-channel approach within the business models can be attributed to the increasing use of smart phones and tablets by the consumers which enable them to stay connected to every part of the globe while sitting at the comfort of their own homes. The purpose of this marks and spencer business model is to evaluate a digital process or service that would be incorporated by a business organization in order to improve its business model. In the context of this assignment, the chosen organization is Marks and Spencer’s, a leading retailer of UK, and this assignment would shed light on the manner in which the organization plans to transform itself digitally by introducing an online platform for selling its products. The benefits of such a digital transformation, the stakeholders affected by the same and the methods used by the organization to communicate the changes to the stakeholders would be discussed in the following section of this marks and spencer business model.
Background of the company
Marks and Spencer is a UK based multinational retail sector organization that has its headquarters in the City of Westminster, London. The organization offers food, clothing and home appliances and accessories. As per the reports of 2017 referred in this marks and spencer business model, the organization fetches a net revenue of 1,062.2 crores GBP annually. Recently the organization plans to undergo a digital transformation and hence considers making a virtual presence with an online platform that would offer the products of the organization (Pantano, 2014).
Discussion
Marks and Spencer plans to collaborate with Tata Consulting Services, which is a leading IT company globally that would enable the iconic retailer to become a digital-first business. In accordance with M&S’s five-year plan to transform its business model, the retailer would be partnering with TCS in order to respond better to commercial opportunities (Petrelli et al., 2012). TCS being the technology partner for the organization would help the firm to incorporate intelligence along with innovation that would, in turn, improve the customer's experience with the organization and lead to the development of M&S both technologically and financially. Since, the business priorities are changing constantly in addition to the customer preferences TCS would help M&S to transform in a way that the organization is best able to cater to the same (Hayes, 2018). Such a collaborative initiative would bring the best of TCS’s technology to M&S. The expertise of both the organizations would merge to accelerate the growth and development of M&S. Through this digital transformation, the organization would be able to simplify many of its business operations and provide the customers with a flawless shopping experience. According to the CEO and Managing Director of TCS Rajesh Gopinathan, the deep domain expertises TCS would not only help M&S to retain its existing customer base but would also help the organization to attract new customers while accelerating its growth (Hines, 2012). Transforming M&S digitally TCS look forward to more such ventures says the CEO.
The organization experienced a 62% reduction in its pre-tax profits, which made it plan a digital transformation, owing to the fact that more and more customers these days prefer to shop online rather than shopping from physical stores (Kenney and Zysman, 2015). The retail chain felt that modernization of the business model would help the organization to regain its profit margins by attracting consumers while maintaining a healthy relationship with the existing ones. The poor financial performance of the company in 2017, made Steve Rowe, the CEO of Marks and Spencer realize that it is necessary to incorporate changes within the business model in order to ensure that the organization regains its revenue (Pantano, 2014). The first phase of the transformation dealt with improving the basics of the organization such as the quality of the products and the marketing strategies. In the second phase, the organization aims to make use of digital technology in order to attract customers through multiple channels (Hayes, 2018). The retailer felt that since most consumers lead a fast-paced life in recent times they prefer to shop for food and clothes online. Not only does this save their time and energy, but it also gives them a wide variety of options to choose from. Moreover, since consumers are able to make payments using online platforms, it improves the ease of transaction and consumers are saved from the burden of having to stand in long queues for making payments. Thus, shopping while sitting at the comfort of their own homes attracts a considerable number of consumers and it’s the prime reason M&S tries adopting an online platform to reach and appeal to its consumers (Petrelli, D., Bowen, S., Dulake, N. and Light, A., 2012). Additionally commercializing through online sites, would enable the retailer to shut down hundreds of M&S stores all throughout the UK, which will rapidly cut down on the operational costs (Piotrowicz & Cuthbertson, 2014). Extensive market research reveals that the footfall of the consumers on the physical stores is decreasing considerably with the passage of time (Pantano, E., 2014). Slowly the physical stores would be the places customers visit for an experience and it will be the online platforms that actually would experience purchase by the customers.
Collaborating with TCS would help the organization to upgrade its existing technology, improve its website and the supply chain management involving clothing and home appliances (Carnall, 2018). The brand suffered from meet the demands of the customers at certain locations; however, it hopes to improve its supply chain management on collaborating with TCS (Hines, 2012). The organization launched its first official website in 2014 which improved the sales along with the profit margins significantly. However, in comparison to its competitors, the organization lacked in its online presence and the prime reason for the same is that its website was pretty slow and hence the consumers got impatient trying to operate it. Thus the company is trying to improve its website as well its customer experience by partnering with TCS.
The stakeholders of the organization include the government, the leaders and mangers of the company, the employees, the consumers and the suppliers of the organization. Although all the Stakeholders of the organization are impacted by the digital transformation, it is the consumers will face the maximum impact. They would be able to shop for food, clothing and home appliances from M&S sitting at the comfort of their own homes. The payments for the goods would also be simplified and the products purchased would be delivered at their doorstep (Brokaw, 2012). This would benefit the consumers immensely as they do not have to take time out of their busy schedule to do their groceries or shop for clothing. The employees of the organization will be benefitted in a way that the manual workload would reduce significantly. However, the organization has to consider training its existing employee base in a manner that they would be able to operate the online platforms well and cater to the demands of the consumers promptly. The decrease in the manual workload also implies that some of the employees might lose their jobs. Additionally, the company may have to higher technically sound candidates who have significant experience in making handling company websites for the sale of products (Carnall, 2018). This, in turn, would ensure a seamless customer experience. In the context of the leaders of the organization digital transformation would be extremely beneficial as it does not reduce the need for a large workforce, but since the organization would be cutting down on most of its physical stores, the operational costs of the company would drop considerably. This would not only improve the profit margins, but a technologically advanced organization is preferred among the consumers and hence its reputation would improve. Moreover being technically advanced ensures growth and development of the company in recent years as it is better able to appeal to the consumers. Digital technology improves ease of access and ease of transaction in addition to being highly cost-effective and time-saving. Moreover, very little financial and physical resources are involved in the adoption of digital technology. The cost and time required for marketing also reduced vastly with the adoption of digital technologies within the organization.
Communicating the plan to the stakeholders of the organization such as the consumers would be done mainly through advertisements. The advertisements would reach the consumers either through print or audio-visual media or through social media platforms (Kenney and Zysman, 2015). Advertisements on Billboards also help to attract consumers. The employees of the organization would be informed about the digital transformation through meetings and conferences with the leaders and managers of the organization.
The Timeframe for this digital transformation is estimated to be 6 months and the cost for execution of the plan is approximately £500, which is quite low as compared to the revenues and profit margins of M&S.
Conclusion
This marks and spencer business model deals with the digital transformation of Marks and Spencer and the way the organization plans to achieve the same. The organization plans to collaborate with Tata Consulting Services in order to upgrade its existing technologies and improve its website and supply chain management. This, in turn, would enable the organization to appeal to a large number of consumers all across the globe, cut down on its operational costs, improve its profit margins and reputation among the consumers and therefore achieve greater height in the retail sector. It is observed in this marks and spencer business model that the manner in which the digital transformation would align with the pre-existing business model of the company, the benefits of the transformation, its impact on the stakeholders and the ways in which such a transformation would be communicated to its stakeholders have been discussed in this marks and spencer business model. Additionally, the time frame and approximate budget for such a transformation have also been provided. Marks And Spencer Business Model assignments are being prepared by our online management assignment help experts from top universities which let us to provide you a reliable help with assignments online service.
References
Brokaw, L., 2012. Marks and Spencer’s emerging business case for sustainability. MIT Sloan Management Review.
Carnall, C., 2018. Managing change.Routledge.
Hayes, J., 2018. The theory and practice of change management.
Hines, T., 2012. From analogue to digital supply chains: implications for fashion marketing. In Fashion Marketing: Contemporary Issues (pp. 46-67). Routledge.
Kenney, M. and Zysman, J., 2015, June.Choosing a future in the platform economy: the implications and consequences of digital platforms.In Kauffman Foundation New Entrepreneurial Growth Conference (Vol. 156160).
Kenney, M. and Zysman, J., 2015, June.Choosing a future in the platform economy: the implications and consequences of digital platforms.In Kauffman Foundation New Entrepreneurial Growth Conference (Vol. 156160).
Petrelli, D., Bowen, S., Dulake, N. and Light, A., 2012, June. Digital Christmas: an exploration of festive technology. In Proceedings of the Designing Interactive Systems Conference(pp. 348-357). ACM.
Piotrowicz, W., & Cuthbertson, R. (2014). Introduction to the special issue information technology in retail: Toward omnichannel retailing. International Journal of Electronic Commerce, 18(4), 5-16.
