Strategic Management in Marks and Spencer

This report covers the functions of strategic management implemented in Marks and Spencer, including background information, methods of development, leadership style analysis, and change management. It also provides future recommendations for the company.

Strategic
Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
1. Background information of Marks and spencer......................................................................3
2. Methods of development.........................................................................................................3
3. Analysing and evaluating leadership style in M&S................................................................7
4. Change Management...............................................................................................................8
5. Sustainability.........................................................................................................................10
6. Future recommendations.......................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
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INTRODUCTION
Strategic management is totally concerned for recognition and description of the plans
that are carried in organizations for acquiring competitive advantages and great performances. It
is a bunch of actions and decisions that are undertaken by a manager that decides the outcome of
the organization’s performance. This report covers all the functions of strategic management
which are implemented in the chosen organization that is Marks and spencer (Hitt and Duane
Ireland, 2017). It is the British multinational retailer specialized in providing home products,
clothing etc. This report describes the background of the company including tools, frameworks
and method that are utilized to analyse the rival environment and make developments.
Recognizing leadership style and management tools to manage the business strategy perfectly
and analysing appropriate strategy of sustainability in marks and spencer. It also provides future
recommendations to strengthen M&S current position.
MAIN BODY
1. Background information of Marks and spencer
Marks and spencer is a supreme British retailer popularly known for providing great
offerings and services. Its food is mainly famous for its freshness, quality and latest innovations.
Organization provides wearable styles of clothing and contemporary home ware goods at great
value to the consumers worldwide. It has 1,400 above stores across 57 countries and has
international websites more than 50. M&S provides a wide range of financial services including
saving and current account, credit cards, mortgages and insurances and also brings fully
renewable electricity services in a great value. Marks and spencer mission is make quality that is
inspirational and accessible to the buyers. Its vision is to deliver a level against which its rivals
may be consistent from consumer experience to keeping the environment safe. M&S values are
customer trust, finest quality, innovation and best services. Since the foundational years of the
company and facing many ups and downs, the company has undergone various changes for
implementing strategies that led to its success.
2. Methods of development
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The various strategic tools that can be used to evaluate the macro environment of the
company are VRIO framework, porters five force model, SWOT analysis, Porter generic growth
strategies and Ansoff matrix (Kukartsev and et.al, 2019).
VRIO framework of M&S
The VRIO framework will help in the analysis of the internal resources of Marks & Spencer for
assessment of its sustained competitive advantage.
 Valuable: The financial resources, highly differentiated retail products and the human
resources are the most valuable resources for Marks & Spencer. The perceived value of
the retail products and services of the company are significantly high and the presence of
economies of scale helps in cost reduction to keep a high profit margin.
 Rare: The employees and the high market value of the products of the company can be
categorised as rare. The company spends significantly in training the staff, and also the
marketing strategies have high rarity which increases the brand equity and uniqueness.
 Imitable: The employees, patents, distribution network, financial resources, tangible and
intangible resources, goodwill and brand equity are not easily imitable. However, certain
product categories can be imitable.
 Organisation: The financial resources capture high value and have been strategically
invested in the right areas and departments, the patent may not be well organised. The
distribution network of the company is vast and operates globally ensuring everything is
done efficiently (Ariyani and Daryanto, 2018).
From the VRIO it can be concluded that financial resources, economies of scale and distribution
network provide competitive advantage to Marks & Spencer.
Porters five forces of M&S
This framework is used for competitive analysis of Marks & Spencer in global markets in the
clothing and retail sector.
 Threat of new entrants: This threat is very low as the number of new entrants in luxury
fashion is very limited as there is high need of economies of scale, better distribution
network etc.
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 Threat of substitutes: This threat is very low as there are no substitutes to high end
clothing.
 Bargaining power of suppliers: The supplier power is high as the cost of manufacturing
highlight depends on the raw materials like fabric etc., therefore this threat can be termed
as moderate as Marks & Spencer has trusted suppliers across the globe.
 Bargaining power of buyers: This threat can be termed as high, as there are various
other competitive or high-quality options in clothing retail market.
 Industrial rivalry: The overall competitive rivalry for Marks & Spencer is high and the
various competitors hinder the sales of the company like h&m, asda, Tesco, Burberry,
primark, zara etc (Carraher, 2018).
Swot analysis
 Strengths: Robust distribution network and logistics, efficient use of financial resources,
well experienced company, high number of outlets both physical and online presence,
variety in products, well perceived in clothing market.
 Weaknesses: High cost incurred due to manual processes, lack of technology in
operations, declining sales due to non-availability of items due to poor supply chain in
certain countries and events, perception in public tat company does not provide clothes
for teenagers.
 Threats: Brexit led issue sin taxations and supply chain, high international competition,
economic instability due to corona pandemic (Wood and Butler, 2018).
 Opportunities: Expansion in emerging economies, online store expansion and use of AI
and unique interfaces, market segmentation.
Porter generic growth strategy
It is the strategy utilized by M&S to achieve objectives of growth. This has three major
streams that are as follows:
Cost leadership: This plan includes earning competitive benefits by lowering the prices to focus
on accessibility and affordability (Islami, Mustafa and Latkovikj, 2020). It is the main plan that
is used in Marks and spencer in its markets to enhance its market share and target people of
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middle class sector that can help in making biggest proportion of all consumers. It is the finest
strategy to serve the requirements of buyers in reasonable prices.
Differentiation: It is the action that is used by with cost leadership in M&S to obtain growth. By
implementing differentiation strategy Marks and spencer expand its base of consumers by
emphasizing unique characteristics of product. By differentiation M&S positions its offerings of
products in a method to stand out and be special from the available options.
Focus: It is the last and third generic competitive plan that influences Marks and spencer to
concentrate on growing in the narrowly targeted segments. By applying this strategy, M&S focus
on both regarding low price and best value offers. By focusing on the attributes of products,
Marks and spencer modifies its branding strategies and bring constant changes in the designs of
products.
Ansoff matrix
It has four major factors that supports in growth and are defined below:
Market penetration: It is the strategy used in Marks and spencer when it concentrates on selling
current products in existing markets and those penetrations look to acquire the increased market
share of existing products by consolidation of competitive costing strategies, sales promotion,
personal selling and advertising. Market penetration helps M&S to reliable supremacy of growth
markets. It also restructures organization market by suspending its rivals and maximizes
patronage of its present customers (Loredana, 2017).
Market development: This is the growth strategy in which Marks and spencer seeks to trade its
current products into new markets. M&S has developed its market in various ways by delivering
a new channel of distribution, packaging, latest product dimensions, fresh geographical market
and distinct pricing policies to captivate assorted customers or generate brand new market
segments.
Product development: In this strategy, Marks and spencer aims to launch latest products into
current markets. The company has fostered a strategy which may need development of up to date
competencies and want the business to develop altered products that can attract extant market.
Diversification: M&S has manifold a lot to inaugurate modernized products into fresh markets.
Yet there are additional risks in this plan but still it gets the fair strategy to secure its competitor
which was present ahead Marks and spencer.
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Post 2016, Marks & Spencer has been focussing on application of market penetration
where it focusses on the present markets and aims at achieving a larger market share of its
present products by various strategies like sales promotions, competitive pricing strategies,
restructuring which all have been quite helpful in driving out the competitors, also being
supported by pricing strategies and promotional techniques in the current fashion retail market.
3. Analysing and evaluating leadership style in M&S
Marks and spencer prime leadership is transactional to acquire company’s goals by assuring
that it is constantly maintaining high performances by implementing and developing certain
skills to achieve success (Kark, Van Dijk and Vashdi, 2018). In terms of Marks & Spencer , the
entire organisations is being led by two leaders who are highly influential and visionary, Archie
Norman as the chairman and Steve Rowe as the chief executive officer. Under the leadership of
these two the company has gone through various changes. Leadership formulates builds,
executes and balance the workings for performing highly and effectively in the company. It is
very important for M&S to have perfect leadership to that could drive employees in the vision
and directions of the company to prepare for the future and ensure that the values of company
turns into business strategies (Velikorossov, 2020). In recent years, Marks & Spencer has been
facing a challenge of declining sales with major business operations issues. The CEO of the
company that is Steve Rowe, has been implementing a transactional leadership style for
increasing the productivity of the organisation. Leadership that is based on performance is very
systematic and oriented with effective results. Steve Rowe, who has served the company from
being a Saturday boy to now the CEO, has implemented changes in recent times like reduction of
the operational committee by half, starting out additional responsibilities as well as reward
systems for employees, practicing delegating techniques, and changing the focus primarily to
customers. He has successfully managed to influence the team to work together for obtaining a
common objective. Leadership skills are to exhibit confidence, passion, ambition and courage
among the team. Marks & Spencer has successfully adopted a leadership and management style
that has inculcated self-motivated employees and have established reward systems like employee
engagement initiatives, employee discounts and bonuses, recognition schemes such as employee
of the month initiatives, corporate gifts such as paid holiday packages. Also, medical and travel
benefits as well as robust retirement and pension benefits, etc are awarded to employees. The
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compensation system has been competitive and loyalty schemes are very popular. The employee
recognition, engagement and motivational practices have led to higher productivity in employees
which proves successful leadership of the CEO to change implementation and in terms of
application of transactional leadership style. Leadership has to be flexible in order to make
complex decisions. Influence is the key element that leads to successful leadership and help
employees to perform well for increasing productivity of the organization. It perfectly
determines the culture, values, modifies tolerance, and motivates employees and shape up
strategies including new executions.
4. Change Management
Change Management refers to the process or method in which an organisation outlines
and executes changes in its internal and external environment both. This consists of preparing
employee and supporting him/her, in establishing the steps that are necessary for change and
lastly monitoring the activities both pre and post changes to make sure that there is successful
implementation (Jayatilleke and Lai, 2018). The changes have been implemented in Marks &
Spencer through structured approaches for being helpful in transitions and mitigation of all the
disruptions tat it is currently facing. The changes that have been implemented in Marks &
Spencer such as restructuring of the corporate, change in leadership and management styles,
store culls, various mergers and acquisitions, changes in implementing technologies etc.
Rosenbaum, More and Steane, 2018).
Figure 1:Change Kaleidoscope
Source: Julia Balogun. 2020
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In order to analyse the changes implemented in Marks & Spencer in the recent years, the
change management model of change kaleidoscope will be adopted. This tool was development
by Balogun and Hope Hailey as a method for combining and arranging extensive variety of
logical highlights through outer and inner rings. This model can be effectively utilised by Marks
& Spencer in selecting the right implementing actions as it provides various contextual features.
The awareness of changes is needed for the motivation of using the tool. Marks & Spencer needs
to analyse all the hindrances along with enablers for changes, which can be done through
analysis of its competencies. it has to take decisions on the basis of the choices of path, the start
point, target, style, roles and interventions (Haggblade and et.al., 2017).
The use of change kaleidoscope will allow the company to evaluate and determine the
reason particularly in certain contexts to changes. As per evaluation, the major changes needed in
Marks & Spencer are changing styles. As per the first element of the model, delegation and
education the employee participation is highly necessary for the company. In the collaboration
element there are requirements for involving all levels of employees in the decision-making
process of Marks & Spencer along with the third function of giving direction and participation.
In the context of changing of the targets there tree functions that have to be focussed upon by
Marks & Spencer are behaviour of the employees and the management, the values and
organisational culture of the company, and the outputs in terms of productivity after the change
implementation. In case of the change levers, the cultural web determines the company culture of
Marks & Spencer and the changes in barriers.
The major interventions in power structures, organisational hierarchy and structure, the
daily operations, rituals and routine of the company are necessary for the right changes to be
implemented in the most effective manner and for a long term by being embedded in the
corporation. Marks & Spencer can adopt a bottom-up approach of change where the changes will
be implemented from the lowest level of employees to the top management. In terms of the
change path, Marks & Spencer can adopt a revolution path as major changes are needed from the
core of its business operations to deal with the problems of declining sales, store culls and
management issues happening in the recent years. All the features need to be considered during
the change implementation, such as scope, time, preservation, diversity, power, capability,
readiness of the employees as well as their capacity (Elley-Brown, Pringle and Harris, 2018).
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5. Sustainability
Now-a-days major organisations are combining sustainability in their strategies because it
results into good outcome. Basically, sustainability in Marks & Spencer addresses two main
factors: the effect of company on the society and the effect of business on environment
(Landrum and Ohsowski, 2018). The prime goal of sustainable company’s strategy is have a
positive impact on either of this factor. When the company does not consider sustainability
opposite may happen, it can face issues like environmental degradation, may face social injustice
and inequality. Sustainability ensures the success of business, today investors give importance to
sustainability before investing in the company and look at the factors like board diversity, carbon
footprint, efforts towards community development etc (Bergman, Bergman and Berger, 2017).
Sustainability also helps the Marks & Spencer to enhance its financial performance while
encouraging public support. M&S strong workforce is one of the motivating factors behind its
concept of adopting sustainable mindset which is aligned with the company’s goal, values and
mission which helps in improving the brand’s reputation, create more growth opportunities and
meet the customer satisfaction (Baumgartner and Rauter, 2017).
Future Sustainability Strategy of Marks & Spencer-
Company has already achieved some parts of Plan A of sustainability program, which was to
reduce the emission by 80% and turn M&S into a zero-wastage business. Company will work
Plan A till 2025, the following are some highlights of the sustainable strategy of M&S-
To help 1000 communities upto 10 million people through environmental and community
commitments.
The flagship or prime goal of the strategy is to make all M&S packaging widely recyclable by
the year 2022.
Decrease the amount of food wastage and reduce operational emissions 80%.
£25 Million charity and commitments plans to encourage healthier products, M&S will ensure
that all its raw materials come from the sustainable sources (M&S sustainable initiatives, 2017).
Company has also declared 25% of its clothing and home products will made from recycled
materials.
M&S have the independent auditors who report the success of their sustainable strategy annually,
company also have its M&S Global community program that helps 1 million people to build
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their livelihood and protect the environment, and company has already achieved majority part of
this plan.
6. Future recommendations
Some suggestions for M&S to feasibly boost its profits are that Marks and spencer has to get
the knowledge of basic fashion right. Currently it is a leader in providing denim and inner wears,
it can add basic needs like school wear for engaging customers. It has to look for style rather
than fashion because this could support the company to take classical approach that better suits
their demographics. Organization has to concentrate on quality instead of price and has to deliver
products online that offer free delivery and returns which can rapidly boost its volume of sales.
CONCLUSION
The above report concludes that strategic management has wide range of activities which
covers all segments of the business. A perfect strategic management can help in monitoring
every business activity and makes objectives clear and measurable. The report concludes that
Marks and spencer needs a proper strategic management to acquire its specific goals and success.
It is also concluded that using different relevant strategic tools appropriately helps in analysing
methods of developments by applying various strategies of growth like Porter generic strategy
and Ansoff matrix supports effectively to Marks and spencer to achieve its business objectives
and sustainable for long term. Reliable changing management models provide betterment and
improvement in managing strategies accurately and it is concluded that planning future
sustainability is very vital to maintain progressive business.
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REFERENCES
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Carraher, S.M., 2018. An examination of an instrument to measure Porter’s Five Forces Model.
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Rosenbaum, D., More, E. and Steane, P., 2018. Planned organisational change
management. Journal of Organizational Change Management.
Velikorossov, V.V., 2020. Strategic management.
Wood, Z. and Butler, S., 2018. Seven reasons why Marks & Spencer is in trouble. The Guardian.
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