Marks and Spencer 2007 Annual Report Download - page 42

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Corporate governance statement continued
40 MARKS AND SPENCER GROUP PLC www.marksandspencer.com/annualreport2007
Principal Risks and Uncertainties
There are risks and uncertainties which could impact the Group’s long-term performance. The risk assessment process is designed
to identify, manage and mitigate business risk. The table below gives examples of activities across Group functions to mitigate
against risks and uncertainties identified. The Board considers that these are the most significant risks to achieving business goals.
The risks listed do not comprise all those associated with Marks & Spencer and are not set out in any order of priority. Additional
risks and uncertainties not presently known to management, or currently deemed to be less material, may also have an adverse
effect on the business.
Clothing and Home
We fail to achieve further
sales growth in an
increasingly competitive
environment with
potentially weaker
economic conditions.
See pp 12-15
and 24-25
Food
We fail to deliver profitable
sales growth while
maintaining an innovation
gap over competitors.
See pp 16-19
Adverse effect on
financial results
Lost market share and
customer loyalty
Adverse effect on
financial results
Lost market share and
customer loyalty
• New and better product, better styling and better value with particular
focus on key departments
• Shorter buying lead times to accommodate fast sellers and new fashion
• Re-alignment of product footage by size of store
• Tracking of customer perceptions of product
• Review of supply chain capacity, sourcing and planning to manage
volume growth
• Growth of international business through our owned and franchised
stores
• Improved e-commerce capability focusing on functionality, availability
and fulfilment
• Plan A initiatives, eg ethical sourcing
• Increase of Simply Food footage and development of e-commerce as
new routes to market
• Continual product and technical innovation to maintain competitive
advantage
• Response to new trends in eating and customer demand for fresh,
natural and healthy food
• Independent quality assessment of key food lines
• Tracking of customer perceptions of product
• Plan A initiatives, eg differentiated raw materials
PRODUCT: We aim to provide a wide choice of great value, quality food, clothing and home products, which are all sourced and
made responsibly.
SERVICE: We have been investing in our people to ensure that we meet our customers’ expectations of consistently great service,
no matter when or where they visit us.
People
We fail to attract, develop
and retain talent with the
correct skills and capability
for succession.
See page 10 and pp 20-21
Business Interruption
We fail to respond to or
recover from a major
incident.
Inability to develop and
execute business plans
Competitive
disadvantage
Inability to operate
effectively
• Competitive reward packages
• Personal performance reviews, development plans and career paths
• Buying Academies in head office and coaches in stores
• Internal and external talent reviews resulting in promotions and external
appointments
• Graduate recruitment and development
• Employee communication
• Tracking of employee satisfaction surveys
• Tracking of customer perceptions of service
• Business continuity and recovery plans in place and regularly tested
• Recoverability of critical IT operations
• Alternative workplace solutions for head office
• Remote working capabilities in place
Risk Impact Examples of Mitigating Activities