Strategic Revamp of Marks & Spencer: A Case Study

The assignment provides an in-depth analysis of Marks & Spencer's strategic revamp, highlighting key business segments that contributed to its success. The focus then shifts to implementing a digital partnership strategy through online cookery classes, which can help M&S gain loyal customers, increase public recognition, and boost sales. The study emphasizes the importance of adapting corporate culture to changing business demands and leveraging digital marketing campaigns to drive sales growth.

Marks and Spencers
(SBU- FOOD)
Introduction:

On 28th September 1884, Marks & Spencer was formed as a partnership between
Michael Marks and Thomas Spencer. They started selling basic groceries like
cookies, needle, thread, buttons. They provided opportunity to consumers to do
window shopping that is they can take a glance of the products without paying any
amount. After the success, they opened 35 more stores in earlier 1900. The
company's 914 UK outlets-222 managed and 349 Simply Grocery stores franchises
as well as 302 full-line apparel and home stores and an e-commerce site of over
seven million registered users service 33 million consumers with a turnover of £ 5.2
billion and £ 4.0 billion in two divisions (food and general merchandise). M&S is a
market leader in womenswear, menswear, and lingerie in the UK market. The foreign
business of the group, which consists of 468 wholly owned, jointly owned.
This assessment will be divided into two parts A and B focusing in “Food” as
strategic business unit. Firstly we shall discuss Internal analysis followed by a small
summary, similarily, external analysis followed by business strategy used by M&S. In
the end of Part A
Internal Analysis of M&S Food

Strengths:
• The brand’s strong reputation.
• Broad range of product line.
• Strong emphasis on improving customer’s experience.
• Healthy food product range.
Weakness:
• Less expenditure on promotions.
• Issues with on-time delivery.
• Poor technology in reading inventory.
• Lack of foreign suppliers.
• The business is losing key workers to its main rivals, including product
creators and food technologists. (Darvey,2016)
• Reluctantancy towards opening new stores
Stakeholders Expectation:
Conflicts between the expectations of M&S stakeholders, short-term
profitability versus expansion, family control versus skilled managers,
financial independence versus share/loan financing, public share
ownership needs transparency and accountability, cost efficiency can
mean job losses, mass markets can compromise quality, mass public
service provision versus specialist services.
Summary:
M&S is the largest retailer in the world and, despite its IT advantages,
management of its empire could leave it vulnerable in certain areas due
to the enormous span of control. Some of its more oriented rivals may not
have the flexibility to do so. The organisation is multinational, but has a
presence in relatively few nations worldwide.
For human resource management and development, a concentrated plan
is in place. People are vital to the business of M&S and it spends time and
resources in training and retaining individuals.
Value chain analysis:

1) Inbound Logistics: The transport, storage and distribution of goods
entering a company requires inbound logistics. The company is ahead of its
competition in terms of the social and environmental effects of its industry
with the introduction of the company's Plan A in 2007 and the winning of the
GBS supply chain award for introducing a genuinely disruptive supply chain.
Its 180-supply chain-related priorities for its purchasing teams, supported by
financial rewards, include ethical trading, energy efficiency and sustainable
procurement and are helping M&S to make it most sustainable in the world.
Further Company has decreased its dependency on full-service vendors and
provide more control over its supply chain management.
2) Operations: M&S Foods has developed in-house bakery and café, in
order change to meet the changing needs of its customer. However, in
2014-15 company faced a lot of difficulties in adjusting with online
operations and distributions, which resulted increase in number of order
cancellations.
3) Outbound Logistics: In terms of order and distribution services, M&S
has several channel operations and gives customers convenience, including
online grocery shopping and self-payment kiosks.
4) Marketing and sales: M&S's marketing strategy is to emphasize the
quality and design of its items. In 2014-2015, the company developed a
cohesive storytelling-based brand identity for its food markets through Just
M&S' to modernize, simplify and create a separate brand across its different
offerings while retaining 'East. 1884, thereby honoring its history. With the
launch of marksandspencer.com, M&S is investing in its digital growth. They
are using social media platforms like Instagram, you tube, facebook, twiiter

and tiktok engaging around 1.5 million customers. Apart from this company
also invested in traditional methods like magazine ads, newspaper ads etc.
5) Service : M&S is investing in customer support, amid many failures in its
in-store service, such as a growing number of out-of-stock products and
online service. The organization has implemented workers zoning across
food halls and continues to expand the number of store employees. Due to
covid-19 restrictions they have also taking care of sanitisation of baskets
after the customer returns using them.
VRIO Analysis:

External Analysis:
A. PESTEL
When a company analyses the external environment, the main goal is to increase opportunities and
decrease threats. This cannot be controlled by the internal strategies used within an organisation. It is
known that macro level forces are not as controllable as micro level forces. PESTEL is the main tool
used to explore external analysis at the micro level of M&S focusing on food as an SBU. The
PESTEL framework is broken down into six key elements including; political, economic, social,
technological, environmental and legal.
Political
Political factors which could affect M&S include Brexit, involving changes in government policies.
Free trade becomes uncertain due to prices of suppliers from the EU becoming higher. M&S pricing
strategy is already being altered and with the consequences of Brexit this will prove difficult. The
International side of M&S may struggle again with new policies, including immigration tied to Brexit.
Economic
Global Pandemic has helped increase food sales at M&S by 0.3% reported in March (Our Year in
Review 2020, 2020). However, focus from M&S was put on supporting food suppliers through the
pandemic, including support smaller food suppliers and a ‘Supporting British Farmers’ campaign
(M&S Response to Covid-19: Workers in Supply Chains, 2020) which short-term did not bring
economic benefits. Budget stores cause corncern for M&S as a direct threat due to the high price of
food products in their stores.
Social
Consumer behaviour is ever changing and so is the culture around M&S. Shifts in value of food is
recognised, which customer satisfaction being lower then expected. During the festive period
customers value M&S more due to premium products and deals. The average age of customers seems
to be higher at M&S than other stores, which could result in profit loss. However, due to the fast pace
environment we now live in, ready meal consumption has increased, and M&S Food prove high
quality ready meals around UK stores.
Technological
M&S are keeping up with the times including self-checkout and online stores being made easily
available. The recent deal made with Ocado allows M&S access to advanced technology however
M&S are not in full control of operations as they collaborated with Ocado which is a risk. The
adaptation to online service was necessary at M&S, this could also entice younger generations to shop
at M&S.
Environmental

Waste and product disposal is something that M&S hope to innovate in the future. Waste levels at
M&S are the highest in the industry (Our Year in Review, 2020). With a focus on fair trade, M&S can
practice more environmentally friendly production efforts but with the current climate this is hard to
mandate.
Legal
Brexit is a concern for M&S legally as trade laws may differ and this is out with anyone’s control. In
the past, M&S was involved in a legal dispute with the landlord at Frascati which had the potential to
tarnish M&S as a brand. Brand name is a huge factor in the success of M&S so this is a cause for
concern after a history of success.
B. Porter’s Five Forces Analysis
Porter (1996) came up with a tool to access the potential attractiveness and profitably of an industry.
The five forces model shown below is created with the idea of a company who is interested in
entering the market but have to consider external factors. With M&S, they are in the retail sector and
this analysis will explore the positioning of M&S Food in the industry and review the intensity of its
competition in present times.

Figure 1. The Five Forces (Porter, 1996)
Threat of New Entrants
In 2018, M&S began to recognise that their Food business focused highly on premium brands which
in turn lost customer satisfaction. The retail sector is fiercely competitive and full of diversification
which M&S struggled to innovate. Despite the retail sector having a low threat of new entrants, M&S
struggled to compete online with other supermarkets who offered a digital shopping experience. As a
result, M&S partnered with Ocado to expand online grocery shopping and give customers immediate
access to over 6,5000 products (Annual Report & Financial Statements, 2019). M&S prided
themselves in offering quality food however competition worked hard to match this quality through
offering fresh product range. The challenge arose from an outdated supply chain, high in waste with
high operating costs diminishing profits (Annual Report & Financial Statements, 2019). The industry
is attractive for an existing company like M&S because of the difficulty of a new company entering
the UK supermarket industry.
Threat of Substitutes
Threat of substitutes in a supermarket is generally low. Leading supermarkets in the UK, such as
Tesco and Sainsbury’s, have innovated their products and provide a high-quality range of food which

M&S believed was unique only to them. Finding lower prices at other stores who offer the same
quality range heightened M&S concern around loyal customers and their preferences around pricing.
Substitutes for the food sector of M&S would be off licenses and corner shops attempting to sell fresh
food products which is unlikely, meaning the attractiveness for M&S to stay in this industry stays
high.
Bargaining Powers’ of Buyers
With the concentration of customers being high in retail, M&S Food have high competition. M&S
believed they has to become more relevant with everyday prices that would appeal to their targeted
audience, families (Annual Report & Financial Statements, 2019). During the Christmas period, M&S
saw its biggest success and growth however this was not the case all year round as customers are able
to find similar products elsewhere. It is easy for a customer to switch between competitors because of
this.
Bargaining Power of Suppliers
Threat of supplier power is low at M&S. Having a powerful supplier brand at M&S is why this threat
is low, products are made exclusively for M&S sales only. In turn, M&S are able to use forward
integration to decide their own prices. However, M&S food supply chain is complex with around 400
suppliers who source their materials from 30,000 farms around the world (Supplier Management,
2020). With recent events, such as COVID-19, the supply chain distribution has been disrupted
causing M&S to support suppliers, for example, British Farms. These smaller suppliers needed
financial support during this time which lowered threat of supplier power due to loyalty shown by
M&S.
Rivalry Among Existing Competitors

In supermarkets, competitive rivalry is extraordinary. Kantar(2020), displayed competitive rivalry
between Tesco, Asda and Sainsbury’s. M&S is in constant competition when looking at food products,
as most large UK supermarkets offer the same food products at a lower price. Furthermore, it is
difficult for M&S to profit on food products because of the fierce competition. This is another factor
which led M&S to partner with Ocado, at a high price (£560.9m) to keep up with current trends and
competitors.
C. Understanding Competition
High
Price
Low
Low Location High
Figure 2. Strategic Group Analysis
As shown in Figure 2, M&S struggle to compete with competitors when looking at price and location.
M&S locate many of their stores in high streets, making it difficult to find parking which is not easily
accessible for customers. Opening more local shops could increase customer satisfaction if placed
strategically. With operating on high streets, utility costs are high, resulting in charging higher price
for products. As a M&S customer, this decreases satisfaction and encourages individuals to shop at a
competitor. The success of other supermarkets is shown in above (Figure 2) with the correct price and
location. Offering many stores UK wide, both in high streets and local areas is why Tesco, Asda and
Morrison’s are leading supermarkets generating higher profits. With fair pricing strategies and
customer loyalty cards is another reason that they are ahead of competitors.
Asda
Tesco
Aldi
M&S
Morrison’s

Business Level Strategy
The Porters’ generic strategy for Mark and Spencer food is focus differentiation. As we know that
Mark and Spencer provide high quality food and products which lead to higher cost than other food
supermarkets such as Asda, and Lidle because they think that higher cost can convince their
customers that it’s worth the money they spend on Mark and Spencer products. The food and drink of
Mark and Spencer that have the Eatwell sunflower logo on top are considered as healthy food and
drink (Healthy Eating, n.d.). Also,most customers of M&S tend to be loyal customers in ways that the
products are meaningful to them. As there are loyal customers, the price sensitivity is inelastic (M&S
FOOD SHOWS CUSTOMERS ITS QUALITY FOOD COMES AT “REMARKABLE” PRICES,
2020). For the food industry, Mark and Spencer is focusing on selling ready meal food which is
considered healthy food for people who want to lose weight, but healthy food is coming into higher
price that cannot make Mark and Spencer to become cost leadership. For the competitive scope of
Mark and Spencer, it is considered a particular segment industry as they focus on food for several
occasions such as Christmas food, Birthday cake, taste of Japan, and seasonal food (The top food
trends to try in 2020, 2020). To be more in detail of Christmas food that Marks and Spencer provides
is referring to starters, turkey, main course, side dishes, desserts, and cheese that are able to serve in
buffet and party style. Mark and Spencer also provide food for
Framework of Strategic Choices:
Corporate parenting style - portfolio analysis matrix
• M&S firms have a portfolio of SBUs

• BCG matrix (Growth, launch, maturity, decline)
(Below are some ideas of which sections things may fall under)
As a long-standing UK business, M&S’ differentiation strategy emphasised quality and value
at a premium price but neglected a key founding value, that of innovation.
M&S should try and look at product development.
For this analysis of M&S SBU, a more traditional analysis was used to evaluate strategic
choice. The analysis is separated into 3 distinct categories; suitability, feasibility and accept-
ability. Four strategies were suggested by our group and decided through following simple
steps.
Feasibility:
1. Does this strategy address environmental factors?
Star (Growth)
-M&S.com
- Food products
- Marketing
Dogs (decline)
• Premium price clothing
• Electronics
Cash cows (maturity)
-Packaging
- Expiration date
Delivery service
Question Marks (launch)
• Menswear & kidswear
• Womenswear
• M&S Bank
• Target customers

2. Is the positioning right for the industry?
3. Does is add resources and competences?
Suitability:
1. Can we do it?
2. Can this be done without the need of additional resources?
3. Are processes in place to allow this strategy?
Acceptability:
1. In terms of risk, is this strategy acceptable?
2. Results of cost-benefits and value (long-term)?
3. Will stakeholders deem this strategy acceptable?
Through internal and external analysis, figure 5 shows the process of strategic choice.
Figure 5. Strategic Choice for M&S Food
The results from the figure above suggest that Digital Partneship and Waste Management is a
strategic choice that M&S Food should undertake. From previous analysis, M&S supply
chain complexity has caused large amounts of food waste and lack of customer engagement
over social media platforms. Through strategy implementation, M&S could save time and
money using a more innovative supply chain and better use of supply chain management.
Comparing their supply chain with competitors will also give an M&S insight on what
changes need to be made.
F S A Re-
sult
F1 F2 F3 S1 S2 S3 A1 A2 A3
In-
House
Delivery
3/9
Waste
Man-
agement
6/9
Digital
Partner-
ship/
technol-
ogy
8/9
Buy
Market
Leader
1/9

Why Digital Partnership can be a better strategic choice?
Covid-19 pandemic taught everyone the power of digital platforms.
Initially Instagram, Facebook, Twitter, You Tube was famous amongst
the young generation only, but lockdown boredom brought people from
older generations also to learn new technologies.
M&S foods is already trying to increase their customer base from these
platforms, but due to lack of customer engagement activities it is
lacking behind when compared to other competitors. Following
strategies shall be implemented to achieve required growth:
• Online Cookery Program: Instagram, facebook and youtube has a feature
of Live streaming, where people can come and join cookery classes for
free. For this initial investment will be sending products which shall be
used in recipes and these products will be suggested from the chefs or if
there is a new launch in the store we can ask chef to create a new dish out
of it. This activity shall be conducted on official page of marks and
spencer’s food.
• Google Blogs/Ads: Image below is simply a screenshot from google when I
wrote 10 best supermarkets in Glasgow, I found M&S from the bottom 4th
position. So, getting upper position on these blogs can help to achieve focus
on the brand, because people who are new to Glasgow won’t be scrolling
this much just in search of super-market (a psychological fact).
• New App-development- Current application for M&S is an integrated app
for clothing and food both. We can try and give a separate app for in-house

delivery to ease for the older generation to access, who is majority of the
customer base.
Strategy Implementation:
Overview of Strategic Implementation:
Above figure explains strategic implementation of “How can M&S food use more
of the digital platform to increase their sales growth”. Where I chose Online
Cooking Classes, for the better reach to the new customer base. From Finance
perspective, I tried giving approximate value with +10% or – 10% buffer budgeting.
M&S needs to make some profound improvements in its approach as part of the
massive retail sector. It should have other brands to market. In this competitive
market, this will allow it to achieve sustainability. It is very famous for its
standards of food quality. This will allow the number of loyal customers to
increase. It will help it compete in price with more and more goods sourced from
overseas.

PART- B
Understandings about the Organisation:
A large British multinational retailer with headquarters in London, England, Marks
and Spencer Group plc (commonly abbreviated as M&S or colloquially Marks and
Sparks) specialises in the sale of clothes, home goods and food products, often
under its own name. It is a member of the FTSE 250 Index and is listed on the
London Stock Exchange, having previously been in the FTSE 100 Index from its
inception until 2019. At the turn of the 21st Century, however the company
encountered a surprising shift of fortune when its core customer base, women
between the ages of 35 and 55, started to avoid shopping in their shops, this posed
a very significant threat to the survival of the company and Marks & Spencer
thought hard and long about how the situation could be rectified. It did so by
transforming the organisational culture by making bold new steps and improving
current structures and processes. The organisation was able to achieve the
customer loyalty back by doing so.
All organisations have their own cultures, consisting of the values and beliefs held
by their members, which decide how managers respond to challenges and
opportunities to a significant degree. But corporate culture, even within successful
organisations, may become stagnant and overly hierarchical over time (Huff et al,
2009). Marks & Spencer was a victim of its own success, much like most successful
organisations. Its corporate culture was inflexible, static, and resistant to change,
since it was felt that there was no need to change because the business was
profitable. A sense of employee entitlement to remuneration and working hours
was firmly embedded. When it became visible, however that the old culture could
not cope with evolving business demands, the top management agreed on a major
revamp. As a result, employees started embracing this new change. Company
started multiple trainings for the employees in order to retain employees, with
that other employee engagement activities were launched.
Contributions of Key Business Segments :
• Finance: Finance played an important role in eliminating unwanted
expenditure, As a result, the company became capable of reducing cost,
provide better cost to customers which resulted as a bonus for overall
profitability.
• Marketing: Marketing team, plays a major role in attracting customer. Marks
and Spencers had a huge opportunity to gain customer loyalty by utilising
free marketing platforms, and engaging customers by different activities.
The business was able to recover much of the revenue it lost by segmenting
its goods for various markets. For each range, different marketing
campaigns are held and this makes the products of the business look more
appealing to consumers.

• Operations: Operations team is somewhere responsible for company’s
reputation in terms of on-time delivery of the product which the basic
requirement of customer for this they tried making supply chain leaner, and
in doing so, a greater focus on timeliness and efficiency was imposed by the
organisation. These contribute to leaner practises that lead to higher
earnings.
• Human Resource: This role is crucial to a strategy's effective execution. The
HRM role at Marks & Spencer has played an important role in changing the
attitude of workers and changing the corporate culture to be more adapted
to the changes that need to take place (Hitt et al, 2004). As a consequence,
workers became more open to change and became more mindful of the
sacrifices they needed to make.
Strategy Implementation:
➢ What is the strategy?
➢ Why I chose this strategy
➢ How it will benefit the company?
Under the heading of digital partnership I chose online cookery classes as my
strategy because in the time of lockdown due to covid-19 pandemic, people of all
age groups tried to learn new skills, like how to use social media or how to learn
new make-up techniques etc.
So, M&S’s social media presence is weak as compared to it’s other competitors.
Despite of posting large amount of content they are not getting enough response,
So this clearly shows lack of customer engagement activities. Online Cookery
classes is the best option for supermarkets to entertain their customers and
through this activity they will gain a loyal customer base as well, which cab help
M&S base in following ways:
❖ Publicity without spending much of the capital
❖ Brand recognition world-wide as internet is the most powerful tool specially
when you are sitting idle in your house.
❖ Increase in the number of online orders, because whether cooking is some
which cannot be defined on the basis of gender, age or demographics.
As per the data from company’s profile I found out that they are running different
digital marketing campaigns for their clothing segment, which resulted them slight
increase in sales but it also resulted in bursting the myth that M&S is only for
people from the age of 35-80. Since marketing is all about building customer
relationship which is resulted in sales growth. Since sales is the cell of every
organisation, or in other words we can say that company’s profitability is

depending totally on the increase in sales, so I tried to take the route from
marketing to sales growth.