Strategic Management at Marks & Spencer

Strategic management

TABLE OF CONTENTS
Introduction......................................................................................................................................3
Methods of development.................................................................................................................3
Leadership styles.............................................................................................................................4
Change management........................................................................................................................6
Sustainability...................................................................................................................................8
Conclusion and recommendations...................................................................................................9
References......................................................................................................................................10

Introduction
Marks & Spencer is a British multinational retailer which is headquartered in London,
UK and has specialization in sale of clothing, food products, home products, which are primarily
of its own label. The total group revenue of the company is £10.2 billion out of which the
clothing and home revenue was valued at £3.2 billion and the food revenue was valued at £6
billion. The total gross profit before tax was valued at £67.2 million and the international and
service operating profit was £110.7 million. Marks & Spencer has a total of 1519 global stores in
62 international markets. The total number of employees of the company are over 78,000. The
vision of the company is to be a stand against which others are benchmarked and the mission is
to create aspiration al quality which is accessible to everyone (Marks & Spencer 2020). This
strategic report will aim at using strategic tools for analysing methods of development used by
M&S and to evaluate the leadership style at M&S. Apart from this change management models
will be critically examined and the future sustainability strategy will be determined, along with
future recommendations.
Methods of development
In terms of organic growth, in which Marks & Spencer has achieved higher output by
improving the sales internally for a very long time, the growth has been diminishing in recent
years in comparison to the external or inorganic growth. Organic growth does not include any
profits attributed from acquisitions or mergers that Marks & Spencer has undergone but instead
the percentage of sales and expansion that the company has attained by the internal resources of
the company (Jin, Miao and Park, 2018). The major aftereffects of poor performance and
declining sales were the major store culls since 2015, a change in the format and the use of the
stores and opening new stores as a part of diversification strategies. Post 2016, various stores in
UK closed that included traditional clothing and food shops and end of season sale outlets. The
store cull costed Marks & Spencer around £200 million in implementation. The culls included
loss making stores in various European markets across Belgium, France, China and the
Netherlands. In the years 2017 to 2018, various smaller stores were closed including various
oldest presence in towns. This would make a total of 100 stores closed by 2022 due to the
declining corporate profits. The company has been facing a continuous declining net profit since
2016. When it comes to store format, major changes were made by changing the usage and
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introduction of full line stores, food halls, home stores outlet stores, and online services (Leite,
2020). Change management strategies include progressing on transformation, outperformance
and focus of food sector, reengineering of home and clothing and positioning Ocado retail
robustly for growth. In order to cover the losses due to the coronavirus pandemic, the strategies
like planned cost reductions, actions for stabilising the cash flows, securing additional headroom
and liquidity for future years and management of extra home stock and clothing. The strategic
alliance with Ocado, which was a major change management strategy by Marks & Spencer took
place in February 2019. The total cost incurred by Marks & Spencer to form the partnership by
acquiring a 50 % stake in Ocado retail was £750 million (Scott and Walker, 2017). Marks &
Spencer formed a joint venture with Ocado retail for strategic significance of getting a broader
customer base and increasing the expertise in food innovation. The other major strategies that
Marks & Spencer has implemented to increase organic growth are the strategic priorities of
transformation of leadership, building accountability, to become a digital retailer, reshaping the
customer profile ranges in the home and clothing. Also, focussing on international growth,
development of high-quality real estate, and doing cost savings and modernising the supply
chains (BBC, 2019).
Leadership styles
In context of Marks & Spencer, the organisation is led by two most influential and
visionary leaders, that are, Archie Norman as the chairman and Steve Rowe as the chief
executive officer. Under their leadership, Marks & Spencer has gone through major changes in
terms of restructuring and international expansion (Fiaz, Su and Saqib, 2017).
However, the company has been facing a declining sales and net profit since the past
three years due to operational problems, the leaders are aiming at countering the issues at the
company through the transactional management. Steve Rowe has been serving the company
since a very long time and in various capacities from a Saturday boy, working on the shop floor
to joining the board of directors and becoming the new CEO. After taking up the position he has
brought many changes in the company by reducing the size of the operational committee to half,
taking care of additional responsibilities of the present employees such as reward systems, high
use of delegation techniques to the employees, driving the focus to customers (Gandolfi and
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