Marks and Spencer 2015 Annual Report Download - page 26

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24
MARKS AND SPENCER GROUP PLC
STRATEGIC REPORT
RISK DESCRIPTION MITIGATING ACTIVITIES
BRAND AND REPUTATION
Our updated values of Inspiration, Innovation, Integrity and In Touch infl uence how we do business and our reputation for being
one of the UK’s most trusted brands
1GM CUSTOMER
ENGAGEMENT
Continued loss of
engagement with
our customer
As we strengthen our brand
recognition and reassert our
GM quality and style credentials,
it is important that we understand
and address our customers’ needs in
an increasingly competitive market.
> Regular engagement with
customers through data
gathered by our Customer
Insight Unit and focus groups.
> Updated brand positioning and
marketing approach with greater
emphasis on product.
> Continued focus on product
quality and style, including
adherence to our Clothing
Quality Charter.
> Continual updates to the
M&S.com website to enhance
the online customer shopping
experience.
> Ongoing improvements to store
environment, addressing specifi c
customer feedback.
> Targeted marketing and
promotional activity using
customer loyalty data.
2FOOD SAFETY
AND INTEGRITY
A food safety or
integrity related
incident occurs or is not
e ectively managed
As a leading retailer of fi ne quality
fresh food, it is of paramount
importance that we manage the
safety and integrity of our products
and supply chain, especially as we
grow our global food business
and given the heightened risk
of fraudulent behaviour in the
supply chain.
> Dedicated team responsible for
ensuring that all products are
safe for consumption through
rigorous controls and processes.
> Continuous focus on product
quality.
> Proactive horizon scanning,
including focus on fraud and
adulteration.
> Food Standards Agency
endorsed approach to reducing
campylobacter.
>
Updated supplier and depot
auditing programme.
3FOOD
COMPETITION
Loss of market s hare,
due to changes in the
competitive landscape
or customer behaviours
With the current upheaval amongst
the supermarkets and the
polarisation between value and
premium, it is important that we
continue to provide a point of
di erence through product quality,
value and innovation, as well as
convenience.
>
Signifi cant focus on product
innovation to retain point
of di erence and drive
customer loyalty.
> Continued focus on product
availability to customers.
> Regular review of price
positioning.
> Simply Food expansion to provide
convenience to customers.
DAY-TO-DAY OPERATION
We are a customer-centric business and strive to deliver an e cient and e ective operation
4GM MARGIN
Failure to improve
margin whilst
maintaining our quality
and Plan A standards
As we drive increased GM margin
through improved design and
sourcing capability it is essential that
we maintain our ethical sourcing
standards and continue to drive
improvements to product quality.
>
Margin targets defi ned and
regularly monitored.
>
Robust and established supplier
ethical audit programme in place.
>
Strong sourcing capability
led by experienced overseas
Sourcing Directors.
>
End-to-end review of GM design,
trading and sourcing underway.
5INFORMATION
SECURITY
We experience a major
brea c h in c yber, sys tem
or information security
The business is subject to external
threats from hackers or viruses, or
sensitive data is accessed without
authorisation.
> Extensive security controls
in place including policies,
procedures and security
technologies.
>
Tight control of sensitive data
through limited and monitored
access and the roll-out of
systems possessing enhanced
security.
>
Established team dedicated to
managing security requirements
for M&S.com.
6IT CHANGE
Unforeseen impact
of I T changes to n ew
and existing systems
disrupts business
operations
As we undertake a number of
signifi cant change programmes,
the rate and scale of IT change is
substantial, with potential to
signifi cantly impact our complex
and interdependent systems.
> Clear decision-making process
for system changes, including
established Change Approval
Board process and change
freezes during critical
trading periods.
> Proactive management of cross-
programme dependencies
including ‘release management’
approach to Group system
changes together.
> Robust disaster recovery
plans in place for critical
business applications.
OUR PERFORMANCE
PRINCIPAL RISKS AND UNCERTAINTIES