Marks & Spencer Case Study Analysis

Marks & Spencer Case Study Analysis

Executive Summary

Marks and Spencer (M&S) is a dominant retailer in the United Kingdom specializing in various industries to include retail, food, houseware, and financial services. Over the past 14 years, they have experienced an unprecedented amount of volatility and changes within their firm. From 1998 to 2004, the company transitioned from being a market trailblazer to becoming nearly bankrupt. The company has worked diligently to implement strategic initiatives to course correct previous trends that adversely affected the company's bottom line. This report will outline their current capabilities by examining the company's internal environment to provide recommendations for future strategies. The overall intent is to identify relevant opportunities for development so that Marks and Spencer can yield a substantial increase in revenue and maintain a competitive advantage over their peers.

Environmental Analysis

Marks and Spencer's initial success was attributed to consistently maintaining a "cookie cutter" centralized formula of operations. Their brand was traditional, simplistic and static across all industries. It offered very little variety in product design and innovation but delivered in quality (differentiated approach). Although this strategic concept was successful for an extended period of time, the company's failure to change with the market industry subsequently lead to their decline. The consumer's lost confidence in their ability to cater to current fashions and trends and to provide them with available diverse options. Their leadership also played an integral part in their overall market strategy. Their visions for the company were antiquated and disconnected from the needs of the consumers. The company's lack of competent human capital led to a series of layoffs and restructuring. Additionally, M&S made mistakes regarding important marketing variables such as the target market segment, the merchandise mix, promotional needs, the degree to which products would need to be altered for the markets, and distributional differences. However, M&S has aggressively worked to improve its operational strategy for continued growth in its niche segment.

Five Forces Model

Historically, M&K was widely known as one of the world's best retail companies and during that time their bargaining power was high. They attributed much of their success to only working with British suppliers who were able to produce high quality products however, it limited their bargaining scope and over time their positioning in the market declined due to several micro and macro factors (internal changes and the economic downturn of the UK economy). Eventually, they altered