Case study: Marks & Spencer
- Analyze the nature and scope of the business environment of Marks and Spencer
- Examine the resources and capabilities underpinning Marks and Spencer
- Evaluate the strategies Marks and Spencer has developed in terms of sustainable competitive advantage
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.
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[...] 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. [...]
[...] Conclusion As we saw in the introduction, Marks & Spencer has been one of the best- known British retailers since 1884 and it has remained the leader for years. However, over the past few years, it has become clear that it has lost its top position and image as it has not been able to assure the long term stability of its strategy. Although, the retailer tried on numerous occasions to develop new strategies that were meant to be sustainable, a lack of management skills and a too strong traditional culture hindered the success of the company repeatedly. [...]