For over a century now, Marks & Spencer (M&S) has been one of the best-known British retailers. Since 1884, M&S has developed a traditional brand image of quality. However, since the end of the familial reign, M&S's results have declined little by little because of, among other things, successions and management difficulties. Due to poor management decisions, global strategies adopted by M&S have not worked as well as it did in the past.
To understand the reasons behind M&S's decline, we will analyze its environment, resources and capabilities, followed by an outline of the possible strategies that M&S could undertake.
M&S is a retailer as it does not manufacture the goods that they sell. Indeed it buys them from suppliers with whom the firm has worked for years (for example Northen Foods is M&S's biggest food supplier). Its objective is then to sell these goods directly to households through its numerous stores. Therefore suppliers play an important role for M&S's business and are one of the key stakeholders. A stakeholder can be described as any individual or group that has an interest in the successful performance of an organization.
As far as M&S is concerned, it is not just the lenders who play a crucial role in the organization. There are key stakeholders who are powerful, have high levels of unpredictability and are interested in strategic developments. For M&S, these refer to the management team, the shareholders, the employees, the suppliers and the customers. Indeed, the management team has the operational power meaning that it has the right and ability to direct and run day-to-day operations. We understand that they play a central role as they are the ones to take decisions regarding the company. For example, if there is a problem in the organization, the management team can involve the highest level of management (the Chief Executive Officer or CEO) to improve the situation.
[...] and Shoemaker, P.J.H. (1993). Strategic assets and organizational rent. Strategic Management Journal pp.33-46. Ansoff, H., McDonnell, E. J. (1990). Implanting strategic management. Englewood Cliffs, N.J.: Prentice/Hall International. Brighteye Performance: realise your potential Cultural awareness and Influence. Available from: http://www.brighteye.co.uk/docs/Brighteye_article_on_organisational_culture_ 2007.pdf [Accessed 15 April 2008] Capra, F. (1996). The web of life: A new scientific understanding of living systems. New York: Anchor Books. Durham University MBA Managing in the Competitive Environment. Available from: www.dur.ac.uk/p.j.allen/mbasaa13.doc [Accessed 12 March 2008] Grant, R. M. [...]
[...] In the article Marks lost its Sparks?', we can see that internal promotion has not always been a good thing for the company. Although this process allowed employees to be in the know-how of company activities and the awareness of difficulties, new ideas were not encouraged and this caused untold problems following the succession of Greenbury. The third aspect is “symbols” such as the language, jargon, logos, specific symbols (status, etc) used by the organization. The importance of this aspect depends on whether these symbols are visible for everybody or not. [...]
[...] The retailer had quality products but customers had other expectations that it could not satisfy. Besides, in an aristocracy, there is heavy reliance on internal promotion so there are no external innovative ideas, which could have helped M&S to maintain its quality production while adhering to efficient customer satisfaction. However, Salsbury came into power in 1998 and changed the structure. He split the role of CEO and chairman and handed power down to the organizational level through delayering. He reduced line management from eight to seven and changed the department division into seven different business units (women's wear, men's wear, etc) so that the structure was more flexible. [...]
[...] It was a family company without tensions which grew due to Michael Marks and Tom Spencer. However in 1984, Derek Rayner, a non-family member chairman, brought his own ideas (such as the international expansion) and his own style of leadership. Richard Greenbury, his successor, followed in his footsteps. In 1998, several strategy mistakes and poor trading results set the stage for a succession battle between Greenbury, Salsbury and Oates. This was a new stage in the transformation of M&S. Therefore, little by little, there was a move from family leadership to professional management which the essence of the M&S success. [...]
[...] In the case of its intangible resources are primarily technological. For instance, M&S adopted the Windows 2000 OS a few years ago in order to gain market advantage over competitors. The company believed this would provide it with more flexibility; facilitating increase in inventory efficiency and better communicate with its channel partners (http://download.microsoft.com/download/4/a/5/4a59ff2f-07fb-48bb-b668- 9b76f0cfdc20/Marks_and_Spencer.pdf). Moreover, it has always had the reputation of being a high-quality retailer, although sometimes “seen as a dull and sluggish company” (Has Marks lost its Sparks?). [...]
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