Marks and Spencer 2009 Annual Report Download - page 61

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57
Risk Impact Examples of mitigating activities
Product
We are the UK’s leading retailer of high quality, great value clothing, food and home products, which are all sourced and made responsibly.
Clothing
We fail to maintain clothing market share
We fail to maintain appropriate inventory levels
We fail to respond to market trends and
consumer preferences
Adverse effect on
financial results
Adverse effect on
market share and
customer loyalty
– Better segmentation of our offer across Clothing
– Improved cataloguing by demographic and customer profiling
– More excitement and newness
– Tight management of terminal stocks and slower moving lines
– Better management of ways and choice
– Strong price architecture – driving Good, Better and Best
– Increased efficiencies across our supply chain: better sourcing,
faster to market, economies of scale on fabric
– Continual review of customer feedback via Customer Insight Unit
– Plan A initiatives, eg ethical sourcing
M&S Direct
We fail to meet customer expectations when
they buy online
Adverse effect on
financial results
Adverse effect on
market share and
customer loyalty
– Clear multi-channel strategy (including in-store collection)
leveraging our online proposition with our well established retail
footprint and marketing activities
– Programme to refresh website ‘look and feel’ and functionality
– Focus on improved order fulfilment and customer service
– Extended product ranges and customer base
Selling channels
We have ambitious plans for our M&S Direct and International businesses as part of our commitment to broadening our multi-channel offer.
Food
We fail to strike the right balance between
delivering short-term profit and protecting
longer term business growth
We fail to halt the decline in market share
We fail to maintain product standards
Adverse effect on
financial results
Adverse effect on
market share and
customer loyalty
Adverse effect on
brand reputation
– Continued investment to improve value perceptions with
customers without compromising quality
– Improved promotional stance and execution
– Good pipeline of innovation to maintain our market differentiaion
– Focus on improved availability and waste
– Continual review of customer feedback via Customer Insight Unit
– Plan A initiatives, eg differentiated raw materials
International
We fail to grow our international business
through franchise operations, partnerships
and wholly-owned businesses
Adverse effect on
financial results
Adverse effect on
brand reputation
– Further business development with our partners in India and
Central and Eastern Europe
– Ongoing review of new markets
– Continued growth of our franchise business
– New systems/processes to support international trade
Plan A
We fail to maintain momentum for Plan A
in the face of current trading priorities and
cost efficiencies
Our suppliers fail to meet our ethical
standards
Adverse effect on
stakeholder trust
and confidence
Adverse effect on
brand reputation
Adverse effect on
financial performance
– Governance in place to achieve our commitments, including
Director of Plan A and clear accountabilities within executive team
– Performance reporting developed and increased assurance delivered
– Plan A integrated into day-to-day operation including Plan A
champions throughout head office and stores
– Open dialogue with stakeholders developing our mutual
understanding of the challenges we face
– Monitoring of our Global Sourcing Standards
Reputation
We are proud of our brand values of Quality, Value, Service, Innovation and Trust which differentiate our products and services. We all have
a responsibility to protect the Company’s reputation in everything we do.
Business interruption
We fail to recover from a major incident
(eg pandemic flu, terrorism, key system
failure) which severely impacts our ability
to trade
Adverse effect
on financial results
Adverse effect on
stakeholder trust
and confidence
– Introduction of Business Continuity (‘BC’) Committee, as recommended
by the Audit Committee, to give greater impetus to existing BC
plans to improve our readiness to respond in each business area
– Regular reports to the Fire, Health and Safety (‘FHS’) Committee
and to the Board on our FHS performance and culture and
increased focus on FHS risks and management KPIs