Using supplier relationships to serve customers better
A Marks and Spencer case study

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Page 2: Market position

Marks And Spencer 4 Image 6When looking at an organisation’s competitive position, it is important to understand the opportunities that exist within a market, as well as other competitive threats. A market can be defined as: ‘a collection of individuals and organisations who are actual or potential buyers of a product or service’. The market environment in which organisations compete is usually known as the micro-environment.

This refers to all the factors that influence an organisation’s activities in a market, such as changes in the needs and expectations of customers, as well as patterns of competition.

Lingerie is a market which incorporates both core and fashion products - changing consumer trends and tastes influence the type and nature of products produced and required. As a result, organisations must constantly develop new product concepts in response to customer demand. If an organisation does not meet these demands and expectations, it will fail. For a company like Marks & Spencer, building on one year’s product successes presents a challenge for the following year, while products which have been less successful will leave gaps to fill and areas to develop.

Decision-makers at Marks & Spencer cannot afford to be complacent when developing goods for such a market. Sound judgement, experience and entrepreneurial flair are all required to understand the complex cycle of the fashion market.

The lingerie market in the UK is worth more than £1.75 billion. Marks & Spencer has a 40% share of this market and is, therefore, a clear market leader. However, the improved performance of competitors and new entrants to the industry mean Marks & Spencer must strengthen its position. Consolidating a market position is concerned with strengthening and further developing that position - it does not mean standing still. Competencies, such as mutually advantageous supplier relationships, must be continually developed to improve competitive advantage.

Marks and Spencer | Using supplier relationships to serve customers better