Strategic Management Analysis: M&S Development, Leadership, Change

This report provides a comprehensive analysis of Marks & Spencer's strategic management, exploring various aspects of the company's operations. It begins with an introduction to strategic management and provides an overview of M&S, including its financial performance, vision, and mission. The report then delves into the methods of development employed by M&S, examining organic growth strategies, store culls, and changes in store formats. It also analyzes the company's leadership styles, including situational, transactional, and transformational approaches, and discusses the influence of key leaders like Archie Norman and Steve Rowe. Furthermore, the report investigates change management strategies, utilizing the change kaleidoscope tool to assess the company's adaptability. Finally, the report addresses M&S's sustainability initiatives, emphasizing the importance of corporate social responsibility. The report concludes with recommendations for future strategies.

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
Strategic management is the ongoing planning, monitoring, assessment and analysis of all
the necessary elements and functions of an organisation which are required to meet the
objectives and goals. Any change in the business environment will require the corporations to
consistent and periodically assess the strategies for attaining long term success (Velikorossov
and et.al., 2020). 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 its foundational years, Marks & Spencer was started as a stall by Michael Marks and
Tom Spencer in 1884 and by 20th century, it preceded with a reputation of selling only British
made goods, which was discontinued by 2002 through development methods, bringing changes
to the business and implanting strategies for success (Scott and Walker, 2017). 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
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a part of diversification strategies. In the period of 2015 to 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 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 5th August 2019. The total
cost incurred by Marks & Spencer to form the partnership by acquiring a 50 % stake in Ocado
retail was £750 million. 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
Leadership is defined as the method of providing a direction, guiding employees,
implementing plans and strategies. Taking actions, managing teams and inspiring and motivating
the people in a corporate environment. The leaders are generally the founders or the chief
executive officers that lead and implement a specific leadership and management style in the
organisation. In context of Marks & Spencer, the organisation is led by two most influential and
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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
Stone, 2018). These changes have been highly appreciated by the management and completely
new departments have been established along with additional responsibilities, he has giver high
autonomy and freedom to the employees and has focussed on achieving the company goals
through effective mobilisation of the resources.
The three major leadership styles incorporated in the entire lifecycle of the company are
situational, transactional and transformational. In situational leadership, the leaders encourage
employees to choose and apply the best leadership style that works for the company. In
transformational style, which is being implemented recently in Marks & Spencer, leaders
identify changes, create vison and gain high employee commitment and participation to
implement the changes. Through transaction leadership style, highly enthusiastic and motivate
people are fostered who work in a well structured and directed environment. The success is in
this leadership style is focussed on attaining the success and targets through the use pf rewards
and penalties. In case of transactional leadership, both Archie Norman and Steve Rowe, both the
leaders tend to value order and structure for manging the multinational corporation and all the
international projects that are led by the company (Al Khajeh, 2018). They have a leadership and
management style that require self-motivated employees and have laid down reward systems
such as employee engagement initiatives, corporate gifts like vacations and holiday packages,
employee discounts, bonuses, recognition schemes like employee of the month. Also, various
retirement and pension benefits, medical and travel benefits etc are given to employees. The
compensation system is highly competitive and loyalty schemes are highly popular along with
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employee recognition, engagement and motivational practices (Hansen and Pihl-Thingvad,
2019).
The company focuses on getting the best talent for their organisational through effective
workforce planning, talent acquisition and career development, which are highly emphasised by
Steve Rowe. The importance of this leadership style is that it is that it is highly transparent about
how things are working and how business procedures are taking place. It is clear that what rules
and regulations are to be followed and who to report to. The flow of communications is centrally
structured and quite effective. This leadership style has led to higher productivity and motivation
among employees, which is highly needed to counter the problems the company is facing in
recent times (Sanda and Arthur, 2017).
Change management
Change management is referred to manners and the methods through which a company
implements major changes within the organisation in both the external and internal processes.
This is done primarily through a structured approach for beneficial transition and mitigation of
disruption. Marks & Spencer has undergone various changes since its inception such as
restructuring, expansion, store culls, mergers and acquisitions, technology implementation etc
(Rosenbaum, More and Steane, 2018).
For analysing the changes in Marks & Spencer in recent years, change kaleidoscope
strategic tool will be implemented, which was produced by Balogun and Hope Hailey as a
method for combining and arranging extensive variety of logical highlights through outer and
inner rings. The outer ring in the kaleidoscope indicates various contextual features of the
organisation such as preservation, scope, time, capability, diversity, power, readiness and
capacity. On the other hand, the inner ring describes implantation choices or design consisting of
change path, start point, style, targets, change levers and roles. Change kaleidoscope can be
utilised productively by Marks & Spencer for selecting the proper implanting actions. It offers a
wide range of implementing actions and contextual feature analysis. Awareness of change is
significant aspect that is encouraged for implementing this tool. Marks & Spencer needs to
evaluate all its contextual hindrances as well as enablers for change in terms of evaluating its
change competency and take decisions about implementing the choices of path, the start point,
target, style, roles and interventions (Haggblade and et.al., 2017).
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Figure 1:Change Kaleidoscope
Source: Julia Balogun. 2020
Using the change kaleidoscope, it allows the organisation to understand the reason why
design choice is needed or required specifically in a specific context. This change management
tool is applied by the change agent group for solving change problems via enablers and
hindrances, detecting the path change design. In terms of Marks & Spencer, the major changes
required are in terms of changing the styles. The first element is education and delegation, by
which a small group discussion of change is supported from the employees. The second is
collaboration, there is need for high employee involvement in decision-making and third is
employee participation and direction. In terms of change target, there are three, outputs, values
and behaviour. In terms of change levers, the cultural web identifies the organisation culture and
the present change barriers. Major interventions into power structures, organisational structure,
routines and rituals are highly significant to develop changes successfully. The change start point
that Marks & Spencer can adopt is bottom-up change, which is initiated from the bottom level
employees to the top management. The change path, usually of four types: adaptation, evolution,
revolution and reconstructions. Marks & Spencer has to adopt revolution path as it needs major
changes from the core to deal with the issues like store culls and declining sales since past 6
years. All the organisational features have to be considered during the change implementation,
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which are: time, scope, diversity, preservation, capability, power, capacity and readiness of the
employees (Elley-Brown, Pringle and Harris, 2018).
Sustainability
Sustainability has become an increasingly important issue for businesses in the corporate
world, sustainability is defined as the major goals in relation to the business impact that an
organisation takes for the people, the planet and the profit through corporate social responsibility
actions. A green business lays positive environmental and community impact and establishes
goodwill and positivity in business operations for the long term. Marks & Spencer has been a
major multinational corporation which have taken up the issue of sustainability across the globe
through its CSR initiatives, objectives, major actions and for giving out to the society. The
company believes in sustainable fashion, as per which the company takes care of every material
and process involved in the manufacturing of the garment produce by ensuring that nothings go
to waste and protecting the planet as a business retailer (Schaltegger and Wagner, 2017). In
terms of protecting the forests, they have taken imitative to slow deforestation. Marks & Spencer
has also planned for plastic ban and made innovative ways to reduce the usage of plastic by
helping out the customers to recycle and reuse. The animal welfare standards of the company are
high and all the food products of the company are produced with utmost care for the animal
welfare. For sustainable fashion, Marks & Spencer has always focussed on quality of its products
and garments by sourcing and using long lasting eco friendly materials for the betterment of the
customers. In terms of csr strategies and goals, there has been a target of 80% reduction in the
emissions in the market method by 2030 and 90% by 2035 (Marks & Spencer 2020). In terms of
electricity, 86% of the electricity the is bought at the Marks & Spencer stores, warehouses and
offices across the globe are sources from on site generation or green tariff renewable source.
Majority of the business operations of Marks & Spencer have gone carbon neutral through a
combination of reduction, procurement of renewable energy, purchase and retire of high-quality
carbon offsets. As a part of the united nations climate neutral initiatives, Marks & Spencer
procures 10% of all its offsets via the procedure of clean development mechanism. By 2025,
Marks & Spencer aims at reducing the refrigeration in terms of gas emissions by 80% for all the
stores that operate in the UK. Marks & Spencer has focussed on 100% recyclable packaging
while using plastic materials in the UK by the year 2022 and contributing to the nationwide
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targets of reding plastic packaging by 2025 in the food sales packaging and the home and
clothing packaging (Marks & Spencer 2020). The company has aimed at eradication of poverty
though edible food chain supply. It has focused on workforce diversity, sale of healthy food
choices to customers, using more energy efficient methods in business operations in order to
implement sustainability development in terms of people, product and planet (Dong and et.al.,
2019).
Conclusion and recommendations
In conclusion, Marks and Spencer has been focusing in strategic management through
consistent and periodically assess the strategies for attaining long term success. It has adopted
various methods of development, which were evaluated through a pestle analysis. These include,
adoption RFID technology across its stores, legal strategies, focus on diversification, supply
chain strategies etc. As per porters’ generic strategies, Marks & Spencer has implemented a
focus strategy. Marks & Spencer has focussed on market penetration as per Ansoff’s growth
strategies. In terms of leadership styles, Steve Rowe has been adopting a transactional leadership
style in the company through employee engagement initiatives, corporate gifts like vacations and
holiday packages, employee discounts, bonuses, recognition schemes like employee of the
month. The change management strategies were elaborate through the change management tool
of change kaleidoscope. The major sustainable strategies were highlighted such as sustainable
fashion, carbon neutrality targets, energy efficiency, reduction in emissions, procurement and
sourcing through green methods etc. Major recommendations for Marks & Spencer in context of
strategic management are use of CRM systems more efficiently, focussing on online markets,
digital marketing, achieving competitive advantage, refurbishment of existing stores, entering
into new market segments etc.
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References
Books and Journals
Al Khajeh, E.H., 2018. Impact of leadership styles on organizational performance. Journal of
Human Resources Management Research, 2018, pp.1-10.
Dong, C., Li, Q., Shen, B. and Tong, X., 2019. Sustainability in Supply Chains with Behavioral
Concerns.
Elley-Brown, M.J., Pringle, J.K. and Harris, C., 2018. Women opting in?: New perspectives on
the Kaleidoscope Career Model. Australian Journal of Career Development, 27(3),
pp.172-180.
Fiaz, M., Su, Q. and Saqib, A., 2017. Leadership styles and employees' motivation: Perspective
from an emerging economy. The Journal of Developing Areas, 51(4), pp.143-156.
Gandolfi, F. and Stone, S., 2018. Leadership, leadership styles, and servant leadership. Journal of
Management Research, 18(4), pp.261-269.
Haggblade, S., and et.al., 2017. What drives policy change? Evidence from six empirical
applications of the Kaleidoscope Model (No. 1878-2017-2512).
Hansen, J.A. and Pihl-Thingvad, S., 2019. Managing employee innovative behaviour through
transformational and transactional leadership styles. Public Management Review, 21(6),
pp.918-944.
Jin, H., Miao, Y. and Park, S.T., 2018. A Case Study of Marks and Spencer lost China. Journal
of Industrial Convergence, 16(2), pp.15-23.
Leite, B.T.D.S., 2020. Marks & spencer out of fashion the case of an outdated brick and
mortar (Doctoral dissertation).
Rosenbaum, D., More, E. and Steane, P., 2018. Planned organisational change
management. Journal of Organizational Change Management.
Sanda, A. and Arthur, N.A.D., 2017. Relational impact of authentic and transactional leadership
styles on employee creativity. African Journal of Economic and Management Studies.
Schaltegger, S. and Wagner, M., 2017. Managing and measuring the business case for
sustainability: Capturing the relationship between sustainability performance, business
competitiveness and economic performance. In Managing the business case for
sustainability (pp. 1-27). Routledge.
Scott, P. and Walker, J.T., 2017. Barriers to ‘industrialisation’for interwar British retailing? The
case of Marks & Spencer Ltd. Business History, 59(2), pp.179-201.
Velikorossov, V.V., and et.al., 2020. Strategic management.
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Online
Change Kaleidoscope, Strategic change. Julia Balogun. 2020. Available through:
<http://xqdoc.imedao.com/1533d1f4e7d13ee3fe246a36.pdf>
M & S sustainability report 2020, Marks & Spencer 2020. Available through: <
https://corporate.marksandspencer.com/stories/blog/mands-plan-a-report-2020-making-
sustainability-part-of-our-family-of-businesses>
Marks and Spencer and Ocado in home delivery deal talks, BBC, 2019. Available through:
<https://www.bbc.com/news/business-47373215>
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