Innovation Strategies and Performance Analysis: Marks & Spencer Report

This report provides a comprehensive analysis of innovation management at Marks & Spencer, a major British retailer. It begins with an executive summary outlining the value of innovation for organizational growth. The introduction defines innovation and its importance, setting the stage for an examination of Marks & Spencer. The main body delves into the organization's history of innovation, highlighting key milestones such as the introduction of food units, employee welfare services, and the adoption of e-commerce. The report then analyzes Marks & Spencer's existing innovation performance and capabilities using a PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors. It also explores the company's partnership with True to drive digital innovation and its 'Plan A' initiative. The report further examines the retail industry in 2020, discussing trends such as augmented reality shopping and omnichannel strategies, and applies Porter's Five Forces model to assess the competitive landscape. The conclusion summarizes the key findings, emphasizing the importance of continuous innovation for Marks & Spencer's success. References are included for further research.

Managing Innovation in
Business

EXECUTIVE SUMMARY
In the process of innovation, new ideas are converted in valuable products and services.
Innovation is vital concept for each and every organisation as it supports in attaining long term
growth and success. Marks & Spencer is a well-known retailer of Britain that brings constant
innovation in its products and services. Bringing innovations in its goods and services helps the
firm in acquiring large market share and gaining competitive advantage in market over the
competitors.

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
The Organisation and its Innovation History...............................................................................1
The Organisations existing Innovation Performance and Capabilities........................................2
The Industry in 2020....................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Innovation is referred as the process of converting an idea into product or service that
developed some value for consumers. Managing innovation is very necessary for an organisation
as it provides an opportunity to learn and implement crucial skill sets, processes and mind sets
for management of innovation and leadership (Acharya, Schaefer and Zhang, 2015). This report
is based on Marks and Spencer which is one of the well-known major multinational retailer of
Britain. The company was founded in 1884 and its headquarter is located in London, United
Kingdom. It is a public limited company that specializes in home products, food products and
clothing. This report covers the overview of industry and organisation. It involves information
about organisation along with its innovation history. It also includes the existing innovation
performance of company and its capabilities. Apart from this, the industry and trends in year
2020 and the key factors that drive innovation for the organisation are discussed. At last, a brief
conclusion is provided that it includes summary based on the entire report.
MAIN BODY
The Organisation & Industry Overview
The Organisation and its Innovation History
Marks and Spencer is a British brand which was established in year 1884 by Michael Marks
and Thomas Spencer. The founder of company was a polish refugee who started a market stall in
Leeds. The company currently has around 960 outlets all across the United Kingdom, involving
approximately 615 stores that only sell food related products. By seeing the innovation timeline
of organisation, it is found that it transformed drastically over the last century. In year 1904, the
company opened its first outlet in Leeds. In 1920's, the firm adopted revolutionary policy that
fostered direct purchase by suppliers. A food unit was also introduced by company in year 1931
which sold canned and packaged items (Biemans, 2018). Apart from this, a welfare service was
developed by Marks and Spencer for its employees by the end of year 1933, which provides
facilities like pension, health care services, subsidized canteen, dental amenities, camping
holidays etc. By continuing these trends, the company has become first retailer of Britain which
established its own research laboratory in 1934 that that helps in pioneering new fabrics.
1

In order to develop effective relationship with producers, farmers and suppliers and work
proximally with them, a food technology department was established by Marks and Spencer in
year 1948. The company conducted a survey up on women's leg sizes in year 1954 which
resulted in creation of unique and improved sizing procedures for stockings. For reducing
internal documentation buy 25 million items yearly, company introduced operations
simplification technique by the end of year 1954. In addition to this, it came up with Chinese and
Indian foods in year 1974. After that, the company entered into E-Commerce world in year 1999
and provide customers with the option of online shopping through their website (Dodgson,
2018). In year 2002, the company introduced Blue Harbour's men's range which results in rising
sales. In year 2016, the company expand its operations and started sales by European market. In
January 2018, Marks and Spencer partnership with TCS to become digital first retail business.
The company focused on machine first concept and brings automation in its business processes.
The Organisations existing Innovation Performance and Capabilities
PESTLE analysis:
In business environment, there are numerous factors which acts as drivers of innovation for
Marks and Spencer in the past. These factors are mentioned below:
Political factor: In United Kingdom, government foster growth of the entities who brings
innovations as well as latest tools and techniques at continuous basis. Marks and Spencer set up
its research and development unit in United Kingdom. The liberal tax policies and other political
regulations by patent box schemes and research and development tax credit has provided
assistance to company. This supports the company to continuously engage in the practices and
procedures associated with innovation (El-Refaie, 2013).
Economic factor: Marks and Spencer perform its operations in many countries among
which most of them are developed economies which provides good opportunities to firm to grow
and expand its operations. The market of United Kingdom is the major source of company to
generate revenues. This encourage company to adopt such processes and techniques which are
innovative and ensure long term sustainability of company in market.
Social factor: the needs and preferences of consumers are changing very frequently which
have witnessed rapid revolution in market. Low calorie and organic food are high in demand that
fosters company to engage in innovation and develop goods with low sugar and calories. In
2

United Kingdom, the millennial generation constantly updating their clothing life cycles that
makes it crucial for Marks and Spencer to perform market research and developed products
accordingly (Greer and Hauptmeier, 2012).
Technological factor: innovation and advancement in technology are seen very constantly
in market with the passage of time which fosters organisation to make utilization of these and
promote development of retail sector. Marks and Spencer make use of innovation and technology
and bring constant innovation and its products that help it in gaining competitive advantage in
market over the rivals.
Legal factor: there are several laws and regulations that are made by government of UK
which needs to be followed by the organisation in order to maintain its stability in market for
long term. By ensuring compliance with federal retail labor laws made by government, Marks
and Spencer can take advantage in the market by running its activities and operations smoothly
(Helper and Henderson, 2014).
Environment factor: as people are now becoming more concern towards environment,
which makes company indulge in practices like recycling of waste and others to attain
sustainability. this act as a driver of innovation for Marks and Spencer as it introduced green
policy named as 'plan A' that enables company to reduce carbon footprint and protect the
environment from any kind of harm.
Existing innovation performance:
The existing innovation performance of Marks and Spencer is good. in order to access the
retail specific Technologies and innovations, the company has partnered with True which is one
of the specialist consumer investment and retail firm of Europe (MARKS & SPENCER SELECTS
TRUE TO DRIVE DIGITAL INNOVATION AGENDA. 2018). This partnership was the part of
ongoing transformation of company which places digital expertise at the key of business. By
partnering with True, the organisation in able to access more than 2000 enterprise ready
businesses each year by its live network. This partnership provides investible opportunities to
Marks and Spencer as it seeks to convert its digital capabilities. A transformational program for
five years has also been established by company in year 2017 which strives to get success in
terms of profits in sales. This resulted to improvements in home logistic and clothing network.
The 'Plan A' innovation funds of company has been created to help in taking innovative
initiatives and practices.
3

Existing Capabilities:
Innovation is the key to growth and success of Marks and Spencer. The company is
capable to come up with new goods and services which are innovative and unique. The
partnership of company with True makes it capable to transform its digital capabilities. Apart
from this, proper implementation of five years’ transformation program makes the organisation
capable to maximize its sales and revenues globally and attain success in retail industry (Jurkovic
and et. al., 2015). Moreover, the firm enable to enter into new markets like Brazil and Poland
that foster growth of Marks and Spencer. The company is also capable of using high end
Technologies like multi-channel platforms and cognitive computing that allow seamless
transition as well as ensure satisfaction of customers by fulfilment of their demands. Unique set
of capabilities and resources are possessed by organisation including effective and close
management of supply chain that leads company to higher quality and lower cost. In addition to
this, the brand reputation of company is also good with large consumer base which has not
needed reinforcement or developments through promotions or advertising. The company make
use of Emotient software which helps in detecting customers reaction towards product and
services, display and signs organisation. By making use of this technology, Marks and Spencer
enable to do aggregation of data or information on the sentiments of customers towards the
delivery service of organisation (Noble, 2017).
The Industry in 2020
Important changes have been seen in past decades in the retail sector and this constantly
evolve quickly. The Dynamics of market at transforming very faster and retailers are required to
adapt to new shifts in consumer preferences, attitudes and demographics. The trends like
shopping with augmented reality, visual search, pop up shops, social shopping, omni-channel
etc. Completely transformed the industry over past some years. The growing trend of online
shopping influence both brick-and-mortar sellers and retailers. Customized consumer-centricity
remains to drives progress and growth in market (Seebode, Jeanrenaud and Bessant, 2012). In
retail industry, innovations are bought in the form of service, product, process, customer
engagement, communication etc. Some examples of retailers including Greggs' Vertically
integrated operations and Holition, an AR enabled mirror from Charlotte Tilbury. By looking
upon these examples, it can be said that key to success of an enterprise is innovation.
4

Porters Five Force Model
Porter's five force analysis helps in determining the competitive position of company in
market. It includes five forces which are mentioned below in context of retail industry:
Bargaining power of buyers: in retail industry, there are many close substitute of each
product are available in market that makes the power of buyers strong. So, it is necessary for
organisation to bring innovation continuously in order to attract large number of customers and
retain them within firm for long term (Prange and Schlegelmilch, 2018).
Bargaining power of suppliers: in context of retail sector, the bargaining power of suppliers
is low as there are many supplies available in the market from which the organisation can acquire
materials. A strong network of suppliers makes the company enable to negotiate with them on
the basis of prices.
Threat of new entrants: in order to enter into a new market, huge investment is required
which makes the threat of new entrant’s low for Marks and Spencer. In the Industry, the supply
chain network of company is effective to out power new entrant who try to accomplish success
in market .
Threat of substitute products: in retail industry, many substitute products are available
which enables consumer to shift to other brand if there is a slight decrease in prices of goods and
services takes place. So, this threat is moderate for Marks and Spencer and it needs to bring
differentiation in its products on regular basis in order to develop loyal consumer base.
Industry rivalry: there are numerous competitors available in market like Tesco, Sainsbury,
ASDA etc. who gives tough competition to Marks and Spencer. It makes the force strong for
company which urges it to operate in the industry by continuously introducing innovative
processes and techniques in order to offer customers with unique products that satisfy them
completely (Wu, Lii, and Wang, 2015).
CONCLUSION
As per the above mentioned report, it has been concluded that innovation includes deliberate
application of imagination, initiative and innovation to drive greater values and involves all such
processes through which new ideas are created and converted into useful goods and services. It is
very crucial for organisation to bring innovation in its goods and services in order to accomplish
5

growth and success in market. Bringing constant innovations will help company in providing
growth and success in market.
6

REFERENCES
Books and Journals
Acharya, V. V., Schaefer, S. and Zhang, Y., 2015. Liquidity risk and correlation risk: A clinical
study of the General Motors and Ford Downgrade of May 2005. The Quarterly Journal
of Finance. 5(02). p.1550006.
Biemans, W., 2018. Managing innovation within networks (Vol. 7). Ro
Dodgson, M., 2018. Technological collaboration in industry: strategy, policy and
internationalization in innovation. Routledge.
El-Refaie, A. M., 2013. Motors/generators for traction/propulsion applications: A review. IEEE
Vehicular Technology Magazine. 8(1). pp.90-99.
Greer, I. and Hauptmeier, M., 2012. Identity work: Sustaining transnational collective action at
General Motors Europe. Industrial Relations: A Journal of Economy and Society. 51(2).
pp.275-299.
Helper, S. and Henderson, R., 2014. Management practices, relational contracts, and the decline
of General Motors. Journal of Economic Perspectives. 28(1). pp.49-72.
Jurkovic, S. and et. al., 2015. Induction machine design and analysis for general motors e-assist
electrification technology. IEEE Transactions on Industry Applications. 51(1). pp.631-
639.
Noble, D., 2017. Forces of production: A social history of industrial automation. Routledge.
Prange, C. and Schlegelmilch, B.B., 2018. Managing innovation dilemmas: The cube
solution. Business Horizons. 61(2). pp.309-322.
Seebode, D., Jeanrenaud, S. and Bessant, J., 2012. Managing innovation for sustainability. R&D
Management. 42(3). pp.195-206.
Wu, L.W., Lii, Y.S. and Wang, C.Y., 2015. Managing innovation through co-production in
interfirm partnering. Journal of Business Research. 68(11). pp.2248-2253.
Online
MARKS & SPENCER SELECTS TRUE TO DRIVE DIGITAL INNOVATION AGENDA. 2018.
[Online]. Available Through:<https://corporate.marksandspencer.com/media/press-
releases/2018/marks-and-spencer-selects-true-to-drive-digital-innovation-agenda>.
7