Critically Evaluate Change at Marks & Spencer
Critically Evaluate Change at Marks & Spencer

Critically Evaluate Change at Marks & Spencer

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  • Pages: 10 (4871 words)
  • Published: October 25, 2017
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Abstract Marks and Spencer (M&S) p. l. c. is one of the largest retailers in the United Kingdom with a selling space of 12.

5 million square feet, was established in 1884 as ‘Penny bazaar’. M&S sells clothing, food, footwear, gifts and home furnishings in its 760 stores around the world. The company’s wholly own and franchise stores operates in Europe, Hong Kong, Far East, Australia, Middle East, the Bahamas and Bermuda making a total of 34 countries. This report critically evaluates the changes at M&S from the mid 1980s to current day.Initially it assesses and outlines the macro and micro environmental factors. Under macro environment the substantial competitive growth is explained using internet technology and globalisation.

Under micro environment Porter’s (1985) five-force analytical tools are investigated, the changing customer needs are verified, suppliers and retailers strategic partnership to face the competitor in the market are studied. Then the key organisational and strategic changes are evaluated from period to period.The cost cut, supplier’s relationship, marketing strategies and acquisition are analysed. Subsequently the internal and the external factors influencing the decline of M&S’s are specified.

Mainly the internal organizational conflicts because of Autocracy, small vision and bias because of patriarchy, negligence of competitor, discontent of customers because of poor service and product are subjected in the decline. However the emphasize on efficient marketing campaigns, customer focus, revamping of shops, customer satisfaction and fresh ideas on product are lighted for turnover.The future strategy is advised based upon internal and external factors where the stability of management team, redes

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igning business Process and Structure comes under internal factors and market Segmentation, Globalization and Localization comes under external factors. Finally after studying the environmental factors, to continue with the sustainable business M&S should keep phase with the customers. List of Contents Abstract1 List of Contents2 List of Figures2 1. Introduction3 2.

Environment Analysis4 2. 1. Macro Environment4 2. 2. Micro Environment5 3.

Key Organisational and Strategic Changes6 3. 1. Employee Relationship7 3. 2. Supplier’s Relationship8 3.

3. Marketing Strategy9 4. Factors Cause the Decline of M&S10 4. 1. Autocracy and patriarchy10 4. 2.

The Gradually Stronger Competitors10 4. 3. Poor Products and Services11 5. Factors Cause the Rise of M&S12 5. 1.

Refreshment of Shops12 5. 2. Improvement of Sales Service13 5. 3.

New Fresh Ideas13 5. 4. Production Innovation14 6. Future Strategy15 6. 1. Internal Strategies15 6.

2. External Strategies16 7. Conclusion and Recommendation17 Bibliography18 Appendix – Group Work Record20List of Figures Figure 1: GDP growth of the UK since 2002 4 Figure 2: Comparison of old structure and new ‘Flatter Structure’7 1. Introduction History and Background Michael Marks, a Russian immigrant established a “penny bazaar” at Kirkgate open market in Leeds in 1884. Ten years later, he invited Tom Spencer to join in his Penny bazaars, which created M&S’s glorious milestone.

In 1903, M became a limited company that had thirty-six bazaars and shops. It continually grew and in 1926 the business floated on the London stock exchange as a public company.Its profits hit 1 million GBP for the first time in 1935 and by 1939 the number of stores rose to 234 (Bevan,

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2002). In the late 1980s, the company became one of the UK’s leading retailers of fashion and food, with more than 300,000 shareholders (Whitehead, 1994). Moreover, M was the world’s most successful retailer in terms of sales per square meter in the early 1990s.

This growth continued by 1997, breaking the 1,000 million pre-tax profits barrier. Thus, the company announced they were to spend 2,100 million GBP on global expansion plans.Nevertheless, 1998 was catastrophic, Pre-tax profits (down to 628. 4 million GBP) dropped drastically (Eaton, 2001). Five years later, the company began a turn for the better from 2002. M becomes the UK’s largest fashion retailer with a market share of 11.

1%, and has a market share of 4. 3% in the food-retailer market; M has 520 UK stores, as well as 240 stores located throughout 34 countries in 2007. According to the M Group’s annual report, pre-tax profits hit 965. 2 million GBP during April 2006 to March 2007 (M, 2007).Purpose and Structure The purpose of this report is to give a critical evaluation regarding the change at M from the mid 1980s to the current day.

The plan for this report is organized as follows: (1) Introduction, (2) Environment Analysis, (3) Key Organizational and Strategic Changes, (4) Factors Cause the Decline and Rise of M, (5) Future Strategy, and (6) Conclusion and Recommendation. 2. Environment Analysis Diversified and inter-connected influences drive the continuous and discontinuous change of the UK retailing sector environment.Three vital layers should be considered: the macro environment, industrial environment (or the micro environment), and the competitors and market environment (Lynch, 2000). This section will examine the environments where M compete.

2. 1. Macro Environment PESTEL analytical method will be employed to investigate the macro environment of the British retailing sector. As shown in Figure 1, the GDP of the UK has increased since 2002. Especially, the GDP of the UK has grown rapidly for two consecutive years (since 2005) and the trend seems to be continuing.Economic growth will boost the consumption of the customers and the retailers will be in a good place to raise funds.

Figure 1: GDP growth of the UK since 2002 Source: National Statistics (2007) According to Turban and King (2003), internet technology renders retailers an additional channel for branding, transactions and customer relationship management, the adaptation of which may drive down retailers’ transaction costs, and ensuring faster and higher quality of customer interactions, resulting in enlarging the existing markets and consumer base.M realizes this and have tried to sell clothing via high street stores as well as via internet though they have experienced cost cutting, rationalisation and management changes in order to revive their business in recent years. Internet technology might enable sustainable competitive advantage, but problems remain on how to physically organize their online retail operations. As argued by Eaton (2001), globalization is an enterprise management feature, which increases liberalization of international trade and international competition.Needless to say, nowadays most of senior managers tend to plan their companies to go worldwide. In the early 1970s, M expanded its international operation to purchase a 50 per cent shareholding of

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