Analysis of the Current Strategic Situation facing Marks & Spencer

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Analysis of the Current Strategic Situation facing Marks & Spencer

What started as a penny bazaar over 120 years ago grew to be one of

the most successful international retail stores and became a household

name. However, in the late 1990s there was a drastic turnaround in the

otherwise consistently high growth of the organisation. The once

multi-million pound profits turned into losses. This case study

analysis looks at the reasons why the organisation began to fail, its

current situation in the market environment today and options open for

it in the future.

In the late 1880's the company started by Michael Marks became a huge

success and due to its rapid expansion Tom Spencer, previously a

cashier, became a partner and Marks & Spencer was formed which showed

steady growth. From the initial core competency of value clothing

others developed. The value-clothing competency evolved in quality

clothing at good prices. Simon Marks assumed the role of management

from his father and implemented aggressive marketing strategies. After

research and investigation of similar American organisations Simon

Marks decided to implement several changes to the organisation which

allowed it to more closely meet the needs of the market segment at the

time and secure strong future growth. These included:

Ø turning the penny bazaars into stores

Ø establishing a simple pricing policy

Ø introducing the 'St Michael' brand

M&S employees also had good working relationships and could be said to

have a 'family' working atmosphere as they were well treated and paid.

Higher positions in the firm were also recruited internally; until the

late 1970's ...

... middle of paper ...

...egments they can begin to differentiate

their merchandise within that market segment and further strengthen

their position. Finally, M&S can begin to once again expand by looking

at new product possibilities in completely new markets such as

financial services. Therefore I would recommend M&S firstly disinvest

loss-making subsidiaries to allow the organisation to concentrate on

rebuilding its core business strength. This can be helped by forming a

strategic alliance with other organisations not to encroach on each

others market for the time-being. Smaller competitors should not be

acquired at this stage until M&S is in a stronger financial position.

References:

Marks & Spencer case study

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by Nardine Collier

Exploring Corporate Strategy

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