Zara vs Mark&Spencer
CASE STUDY ANALYSIS
February 21, 2008
Sommaire I- Introduction 3 II- Analysis 4 III- SWOT Analysis 6 IV- Solutions 7 V- Recommendations 9
I- Introduction
This case study presents two companies, Marks & Spencer and Zara, which are active in the apparel industry, and examines supply chains and the product-process linkages of both companies. Marks & Spencer, originally named Penny Bazaars, was founded by Michael Marks in 1884 in Northern England as a clothing sales company. Ten years after its startup, Thomas Spencer joined Michael Marks and became co-owner of the company. From 1894, the company has continued to work under the name of “Marks & Spencer (M&S).” Influenced by American chain stores, M&S started to sell both food and clothes in the 1920s. The company experienced a rapid growth from 1894 to 1939, expanding its 234 stores. In order to reach the highest quality in its products, M&S concentrated its strategy on the close cooperation with suppliers and the use of new technologies. In addition, the company added internationalization and product diversification to its strategy in the late ’80’s. On the other hand, despite this promising strategy, M&S started to undergo a gradual decline in its sales; consequently, in its profits in the 1980’s. A decrease in market share followed this drop. Moreover, in the late 1990’s, the share prices of the company decreased dramatically. By contrast, Zara, another clothing company founded in Spain in 1963, achieved a remarkable success in the textile market in short period by its brand new supply chain and correct business philosophy, including creativity, innovation, and fast market response. This case study will analyze the sources of the decline of the company by analyzing its chain value. This section will be followed by a SWOT analysis. Then, it’ll present solutions and provide recommendations to prevent similar problems in the future.
II- Analysis
The success
February 21, 2008
Sommaire I- Introduction 3 II- Analysis 4 III- SWOT Analysis 6 IV- Solutions 7 V- Recommendations 9
I- Introduction
This case study presents two companies, Marks & Spencer and Zara, which are active in the apparel industry, and examines supply chains and the product-process linkages of both companies. Marks & Spencer, originally named Penny Bazaars, was founded by Michael Marks in 1884 in Northern England as a clothing sales company. Ten years after its startup, Thomas Spencer joined Michael Marks and became co-owner of the company. From 1894, the company has continued to work under the name of “Marks & Spencer (M&S).” Influenced by American chain stores, M&S started to sell both food and clothes in the 1920s. The company experienced a rapid growth from 1894 to 1939, expanding its 234 stores. In order to reach the highest quality in its products, M&S concentrated its strategy on the close cooperation with suppliers and the use of new technologies. In addition, the company added internationalization and product diversification to its strategy in the late ’80’s. On the other hand, despite this promising strategy, M&S started to undergo a gradual decline in its sales; consequently, in its profits in the 1980’s. A decrease in market share followed this drop. Moreover, in the late 1990’s, the share prices of the company decreased dramatically. By contrast, Zara, another clothing company founded in Spain in 1963, achieved a remarkable success in the textile market in short period by its brand new supply chain and correct business philosophy, including creativity, innovation, and fast market response. This case study will analyze the sources of the decline of the company by analyzing its chain value. This section will be followed by a SWOT analysis. Then, it’ll present solutions and provide recommendations to prevent similar problems in the future.
II- Analysis
The success