Relationship Management Essay Example | Topics and Well Written Essays - 2500 words

Relationship Management - Essay Example Their son, William Henry Smith took over the business and was joined by his son, William Henry Jr. and WH Smith and Son was born. The firm based its growth on the railway boom and capitalized on it by its presence in the railway stations and using the railroads as a means of distribution. For many years, the main rival to both W H Smith's railway station and news distribution business was John Menzies. WH Smith addressed this competition by buying out all retail outlets of Menzies in 1988. This has resulted in an amazing presence for WH Smith in every single railway station in Britain. In the year to 31 August 2004, W H Smith plc had a turnover of 2,834 million, on which it made a pre-tax loss of 130 million, due to significant "exceptional items" and losses on the sales of subsidiaries. Disposals during the year reduced the group's net assets from 409 million to 256 million. At its December 2004 share price of around 323p, the company's market capitalization was just under 600 million. (wikipedia.org) The company had been having a series of problems including the retail where it has faced tough competition on diverse fronts, significant fall in pension funds that has caused internal tensions and from the threat from its distribution side that all contributed to its financial downfall. There is no doubt that the company has to try to revamp on all fronts to recap its former glory. The main The main disadvantage of WH Smith is that it lacks a distinct retail identity and that shoppers no longer have a real reason to visit its stores. It has lost its niche and needs to re-find it in order that it builds itself a solid identity. It has suffered the onslaught of specialised competitors and its sales have declined due to it losing customers. Specialist retailers such as HMV, Waterstone's and Ottakar's offer a far wider range of music and books. Amazon burst on the scene as an online retailer and built its base so quickly and this has influenced WH Smith's sales. It has also been squeezed by Asda and Tesco, which sell basic stationery and magazines more cheaply. In addition, shoppers seeking DVDs and compact discs are just as likely to pick them up at their local Tesco too, along with their envelopes and greetings cards, other traditional WH Smith staples. Attempts at diversification such as publishing have not been as successful as expected. Kate Swann, WH Smith's chief executive, said the company aimed to "reinvigorate" itself. "We aim to return the UK High Street Retail business to its role as Britain's most popular stationer, bookseller and newsagent," she said. Ms Swann admitted the firm had lost out to competition from supermarkets and had not helped itself by providing "an inconsistent product offer and an inadequate strategic response to competition". However, she said the stores still had great potential. "The business has unique strengths through its extensive store portfolio, strong market shares and high customer footfall. "Our plans encompass improved efficiency through cost savings and margin enhancement, while rebuilding the competitiveness and depth of our product ranges." Relationship management Relationship Marketing is a marketing method in which businesses consistently maintain two-way communication with their prospective, current and inactive customers in order to gain a deeper understanding of their needs while delivering personal and compelling marketing