Page 281 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Retail Business Environment

Notes  In addition to the product itself, value-added service is also an important part. The
value of the product or service to customers should be created to appeal to customers.
Furthermore, well working long-term relationships need to be established between
the company and customers. This should greatly help to maintain them and to
increase their loyalty to the brand. Salsbury’s proposal of customer-focused approach
should be appreciated. Unfortunately, the fact not to segregate different items and
to deal with customer complains poorly reveals that this approach seemed not to be
implemented very well.

Stakeholder Influence

Strategy making takes place in a political context, so the impact stakeholders will be considered
in this section. These stakeholders are most of all:
1. Employees
2. Senior managers (excluding Sales bury)
3. Sales bury

4. Customers
5. Suppliers
6. Competitors
These individuals or groups can next be placed in a power/interest matrix which helps to
analyse their potential influence on strategy. Having done that, ways can be found to reposition
them if necessary (see illustration 3 below).

Illustration 3: Repositioning Main Stakeholders

The analysis implies that it is most important to shift the individuals or groups in box one to
boxes where their impact on strategy is weaker:
(a) In the case of competitors, their power has grown because of M&S inability to position
itself clearly in the market. By enforcing Vandevelde’s new strategies their potential
power should decrease leading to a shift in box two.
(b) Salesbury’s influence is probably still strong because of his position and tradition in the
company. However, outside pressure already forced him to accept Vandevelde. Increasing
this pressure over time through PR and positive customer perception of the company may
decrease Salesbury’s power gradually over time leading to a shift in box two.
(c) The power of suppliers used to be high because M&S only sourced from a few British
suppliers. Their interest in the company was high too because M&S was a major buyer.
Their power already has been shifted to box two when Vandevelde started to purchase
goods from Asian suppliers.
In summary it can be said that a new strategy has to take the political context into account
represented by M&S’s main stakeholders if future strategies want to be implemented successfully.

Strategy Development

The true strength of an organisation comes to the forth during changing environment. When the
environment is static, the organisation knows its capabilities, and it devices its strategies
accordingly. A successful organisation is one that can adapt itself according to the changing

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