Strategic Management: M&S Case Study

This document provides a comprehensive analysis of strategic management in the context of Marks & Spencer (M&S). It covers M&S's background information, methods of development, leadership styles, change management, and sustainability efforts. The case study explores M&S's transformational plan, leadership styles of Steve Rowe and Archie Norman, the Change Kaleidoscope model, and M&S's sustainability strategy under Plan A.

Strategic Management
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Table of Contents
(1) M&S - Background Information ...........................................................................................3
(2) Methods of development ......................................................................................................3
(3) Leadership styles....................................................................................................................5
(4) Change Management ............................................................................................................6
(5) Sustainability.........................................................................................................................8
(6) Conclusion & Recommendation ...........................................................................................9
REFERENCES..............................................................................................................................10
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(1) M&S - Background Information
M&S is a British based multinational corporation which deals in selling apparels, home
products, food products and is also listed on London stock Exchange. M&S has global presence
and currently it has 959 stores in UK. There are around 24 million customers that shop in the
stores of M&S every week and around 2 million customers visit their online website M&S.com
every week (About M&S.2020). They have around 82,000 employees in total. The company also
reused and recycled 147 million cloths hangers in the year 2011 and 2012. The current revenue
of M&S is 10,181.9 million, their current operating income consist of 254.8 million and their
current net income is 27.4 million. The company also offers online food delivery service and it
became the first British retailer that made a pre-tax profit of over £1 billion. M&S is operating
in 29 different countries and have 198 outlets which are franchise.
The mission of M&S is to make an inspirational quality accessible to others through the
depth and their range of products. They also aim to excite their customers and inspire them
through their innovation.
The vision statement of M&S is to be a standard in the market against which the others
are measured by offering quality value, service, innovation and trust. They also aspire to fulfil
the modern needs and expectation of the customers by taking along their heritage in parlance.
M&S makes an effort that whoever walks as the visitor in the stores becomes the customers and
purchases. They ensure that their stores have for everyone, something that can satisfy the needs
and wants of the customers.
(2) Methods of development
The method of development used by M&S when Steve Rowe was Chief Executive was
transformational plan. The first stage consisted of putting out the fires in the first two years
which is from 2016 to 2018. In this stage the focus of the company will be on identifying the
problems which the company is currently facing and dealing with the problems quickly.
After the first stage, the second stage consist of restoring the basics in which the company will
change something in the structure and system and will try to reshape the organization.
The next stage of M&S is to shape the future and making M&S special.
The organic development consist of growth through changing the internal system of M&S
through the case study the organic development consist of continuing the stores and growth.
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Steve also cut 525 jobs at the headquarters which is situated in London. And for organic
development he also moved 400 roles to the cheaper locations which are located outside the
capital city. For reducing the cost which are incurred Steve cut premium pay for Sunday
working. Also 25% stores which were full line were enmarked for closure, relocation and
conversion to food stores. The company decided to open 600 simply food stores as it was
successful as compared to clothing stores.
For external development, M&S has done partnership with Ocado for its supply chain logistics,
and they are working together on product database from past some years. Through this
partnership it ensured that customers can order 6000 food products and 800 other products of
M&S through the platform of Ocado. The partnership took place in February 2019 and the type
of partnership that took place between M&S and Ocado is transformational partnership. The cost
involved in the partnership consist of £750 million which was spent by M&S to buy 50 per cent
stake in Ocado's retail arm. Through the strategic alliance with Ocado, M&S have encountered
an increase in sales of its products. It increased the competitiveness of the company.
In the transformation plan the company will address the issues some of which are as follows :
A complex corporate culture and structure – The first issues that is to be sorted in
M&S is to clear all the extra and unnecessary rules and activities that leads to wastage of time
and reduction in productivity. The complex structure and the culture of M&S must be simplified.
The focus must be more on opportunities (Onaran. and et.al., 2017).
Behind the curve in digital – The company can firstly optimize its website and structure
it to make it look more attributive. M&S can also use various digital platforms such as social
media, blogs and emails. The company can also create visuals and make the audience engage
with it. So to get an edge in the digital curve M&S can undertake various steps.
High cost retailer with inefficient supply chain – This is the second last issues which is
to be resolved and the inefficiency of the supply chain can be improved by increasing the
visibility of supply chain, engaging the IT department of M&S. The company should also
increase the information sharing and visibility. To due to high cost the company is also planning
to cut few a number of jobs at the London head office (Marks & Spencer set to cut 950 jobs.
2020).
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(3) Leadership styles
The current leadership style of M&S is transactional leadership style in which the
employees are motivated by giving rewards and punishments. It is believed to work in a
structures' environment of system of the organization. In this type of leadership the employees
are self-motivated and work in a structured manner (Hussain. and et.al., 2017).
The leadership style used by Steve Rowe is autocratic and authoritative as he has a
reputation of being a tough-minded manager. The company and employees also nicknamed him
“Nails” which means he is as hard as a nail. He is considered to be strict in terms of producing
the quality products, and he also clicks pictures of substandard packaging and rearranging shelf
displays when visiting local stores. Robert Swannel regarded Steve's knowledge as
'encyclopaedic' as he has vast amount of knowledge about the business and market. The
leadership was shown when under Steve the digital sales grew as Rowe has been the director of
E-commerce at the company (Johnson, G., et al., 2019). In this case Steve has the understanding
of the challenges and also have devised ways to overcome it (Chukwusa, 2018).
Advantage of authoritative leadership style to M&S – The leader provides direction and
vision, reduces time wastage in decision-making, creates clarity within the chain of command.
Disadvantage of authoritative leadership style to M&S – The employees may feel
dissatisfied, creates a dependent work culture, lack of trust is created.
The leadership style used by Archie Norman is hand on leadership style as brought
several appointments at the top management including the new directors of both the food and
clothing businesses. Also, new heads of menswear, womenswear and digital platform head. In
this style of leadership the leaders blend the leadership and management by providing feedback,
training etc. In this type of leadership style the leader leads from the front and also employees
work side by side to achieve the goals (Jasper, 2018). There are various benefits of hands on
leadership style such as it ensures quality and things are done correctly. Leading by example is
the main component of hand-on leadership style. Also, Archie strives to take initiative and make
efforts to make changes in all organization. It aims at developing new plans and making efforts
to implement it (Gandolfi. and Stone, S., 2017).
Advantage of hands on leadership style – It improves the employee relation in M&S,
there is informed decision-making, and there is increased collaborative level.
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Disadvantage of hands on leadership style – Lack of coordination, sometimes may lead
to communication gap.
Transformational leadership style
In this type of leadership the leader encourages and inspires the employees to identify
changes and also he works with them to identify the same. He tends to motivate the followers
and make them strive towards bringing positive change by directing them. They foster ethical
work culture at M&S and also encourages open communication.
Situational leadership style
As per this style of leadership the leaders assumes that there is no single style of
leadership, the effectiveness of the leadership style depends upon the situation and the
implementation of the skills into that situation (Wright, 2017). This style of leadership has two
aspects which are leadership style and skill and competence present in the leader.
(4) Change Management
There were many issues that M&S were facing and it was also a challenge for Steve.
From the case study it is clear that when Steve took up the position of Chief Executive he faced
various challenges such as: the clothing business was stagnant, the stores were running out of
stock etc.For change management M&S uses Change Kaleidoscope model.
Change Kaleidoscope Model
Change Kaleidoscope model consist of three rings the outer circle consist of organizational
change context or the change highlights, the middle circler consist of the features of change and
the inner most circle defines the choices of the designs that can be made (Haggblade. and et.al.,
2017). The contextual features consist of the following:
 Time – It determines the period within which the change has to be undertaken.
 Power – It determines that need of power to introduce the change in M&S.
 Scope – It determined the extend to which the change can be undertaken whether
realignment is to be done or transformation.
 Preservation – The factors or characteristics which are needed at the time of undertaking
the change.
 Diversity – The difference in the attitude, values and norms among the group of
employees or divisions.
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 Capability – In this the competency and the skills of the M&S which is needed to
implement the change is defined.
 Capacity – It ensures that M&S have adequate resource in terms of cash, human resource
and time which is needed to implement the changes.
 Readiness – In this factor the awareness level and the degree of readiness among the
employees for the change is determined.
The design or implementing choices consist of the following:
 Change path – In this the roadmap of the change is determined which are categorized into
evolution, adaptation, revolution and reconstruction. M&S must decide the path for their
change.
 Change start point – In this part M&S determines that starting point of the change which
can be categorized into top-down change, bottom-up change, pockets of good practice or
pilot sites.
 Change style – Managing the process can be done five styles which are by educating and
delegating, collaborating, participating, directing and by imposing the change through
authority.
 Change target – M&S determines the change in terms of output, behaviour pattern and
also values.
 Change levers – In this the level of levers which are needed for that change in M&S is
determined. Organizational control system, culture and structure are determined for
implementing any changes in the organization.
For successful implementation of the change M&S properly analyse the organizational context
and also they need to examine the contextual obstacles to understand the ability of change.
The changed adopted y Steve Rowe were cutting 525 jobs at the London head office and also he
moved around 400 roles to cheaper locations. He also curt the premium pay for retail staff for
working on Sundays. Also he decided to close or relocate or covert stores to food stores, the full
line stores which amounted to 25%.
Norman introduced transformational plan which consisted of four stages which are putting out
the fires, restoring the basics, shaping the future and making M&S special (Alqatawenh, 2018).
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(5) Sustainability
As per Plan A the sustainability strategy and their objective consist of making all the
packaging of M&S widely recyclable by 2022. To reduce the wastage of food by 50% by 2025
and also they aim to reduce 80% of the emission by their operations as compared to 2007. the
company has also committed to net zero emission in 2020, and they aim to be a net zero in all
over their operations by the year 2035. They also aim to remove all the artificial flavours and
colours from their food and sustainability sourcing becomes their main objective.
Their plan A 2025 has three pillar approach for the future which focuses on well-being of
customers and employees, transforming lives and communities and also they aim to care for the
planet. They also focus to raise £25 million for charity purpose. Also, they aim to include a
clothing recycling initiative and aims to use at least 25% material which is recyclable in 1/4
apparels it sells (M&S Unviels Revamps Sustainability Strategy, First-Ever Science-Based
Target. 2020). The sustainability objective of M&S as per plan A is to reduce the bad impact on
the environment by doing partnership with customers and other stakeholders to make their plan
A highly successful and making a positive impact in the society. The importance of this strategy
is it will reduce the greenhouse gas emission in M&S operations which are present all over the
globe. Also, through their plan A strategy they will be able to achieve carbon neutrality. Through
their plan A they also ensure that raw material used by M&S should come from sources that are
sustainable. By turning their company into zero waste business they will also undertake
corporate social responsibility and through which their brand image will also be enhanced.
Through this plan A they are ensuring that M&S will embrace a sustainable future.
They strive to source their raw material including the cotton from the sustainable sources
by 2025 and also to reduce the greenhouse gas emission by 80% compared to 2007 in all its
operations by 2030. they also strive to cut the emission in its supply chain by 13.3 tons. Through
their plan A they have managed to saved £750 million. The importance of this strategy is that by
undertaking all these steps, M&S will be able to combat climate change, indulge in ethical trade
practices and reduce unnecessary wastage. By doing these, shoppers will be able to carry on
healthier lifestyle and it will also increase the trust on the part of customers for the company. As
the competition is rising therefore top stand out and hold their customers M&S is aiming to
make positive change in their lifestyle and also in the environment through this Plan A. they also
advertise healthier products and also ensures that the materials used for making those healthier
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products must come from sustainable source. Also, for analysing their progress in sustainability,
an independent auditor and auditor of M&S will present a report on the progress.
(6) Conclusion & Recommendation
From the above report it can be concluded that M&S operates as per some values and
have certain mission and vision which determines their aim of existence. There are various
methods of development that the company has used and also its importance to M&S is also
determined. The leadership style adopted by Steve Rowe is authoritative leadership style and
autocratic style and the leadership style adopted by Archie Norman is hands-on. Change
Kaleidoscope model was discussed to understand the change management by M&S.
Some recommendations to M&S are:
 As the clothing business of M&S was getting stagnated therefore the company should
make efforts to make their apparels more refreshing and as per the trend going on in the
market. For this purpose they can hire designers and interns that have immense amount
of knowledge about the trends in the market.
 As the stores were running out of stock they should ensure that adequate stock has been
ordered before hand. For adequately managing this various stock levels must be
calculated such as minimum and maximum stock level, average and danger stock level,
safety stock level etc.
 M&S should also undertake Total Quality Management.
 As the customer base was aging therefore the company must adopt payment automation
tools for making the payments and ensuring full transparency of the system.
 For increasing M&S digital sales the company should increase their product review and
also give certain discounts to their premium customers. They can also give discounts on
referral purchasing and can boosts their digital sales.
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REFERENCES
Books and journals
Alqatawenh, A.S., 2018. Transformational leadership style and its relationship with change
management. Verslas: teorija ir praktika, 19(1), pp.17-24.
Chukwusa, J., 2018. Autocratic leadership style: Obstacle to success in academic
libraries. Library Philosophy and Practice. p.1.
Gandolfi, F. and Stone, S., 2017. The emergence of leadership styles: A clarified
categorization. Revista De Management Comparat International.18(1). p.18.
Haggblade, S. and et.al., 2017. What drives policy change? Evidence from six empirical
applications of the Kaleidoscope Model (No. 1878-2017-2512).
Hussain, S.T. and et.al., 2017. Transactional leadership and organizational creativity: Examining
the mediating role of knowledge sharing behavior. Cogent Business & Management.
4(1). p.1361663.
Jasper, L., 2018. Building an adaptive Leadership style. Strategic Finance.99(9). pp.54-61.
Johnson, G., et al., 2019. Exploring Strategy Text and Cases, 12th edition Pearson, pp 490-492.
Onaran, H.O. and et.al., 2017. Systematic errors in detecting biased agonism: analysis of current
methods and development of a new model-free approach. Scientific reports. 7(1). pp.1-17.
Wright, E.S., 2017. Dialogic development in the situational leadership style. Performance
Improvement, 56(9), pp.27-31.
Online
About M&S. 2020. [Online]. Accessed through:<https://www.bbc.com/news/business-
53471973>
Marks & Spencer set to cut 950 jobs. 2020. [Online]. Accessed
through:<https://marksandspencerforbusiness.com/about-ms/>
M&S Unviels Revamps Sustainability Strategy, First-Ever Science-Based Target. 2020. [Online].
Accessed Thorugh:<https://sustainablebrands.com/read/organizational-change/m-s-
unveils-revamped-sustainability-strategy-first-ever-science-based-target>
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