Executive Summary
In a competitive and rapidly market, accelerated change is the only option. We’re becoming more relevant, more often to our existing customers and appealing to new ones. The right actions and a strong management team can revive again one of the UK’s most special brands. A business is much loved its employees, customers and suppliers.
Mr Steve Rowe Chairmain, set out his diagnosis of our problems and announced the beginning of a five year transformation programme strategy. Marks & Spencer, in annual report set out in great detail the composition of that programme. The first phase is about restoring the basics getting the organisational structure and infrastructure of the business fit for the future.
Our supply chain in both Clothing & Home and Food require significant re-engineering. In the fast moving fashion we are slower than most of our major competitors. M &S online sales are growing, our capability is behind the best of our competitors our filfiment centre at castle donington has struggled to cope with peak demand. Technology support is improving as we are migrate off legacy systems and an old mainframe. In retail business our customer base has narrowed and we have lost share of younger family age customers.
Although we will present more detail of the transformation strategy over the next 1year. We are closing near to 25% of our clothing and home space. Web sites is being improved and we are investing to remedy the problems at Castle donington.
Aim to almost double our online share of clothing and home sales to over 35%. Reduce the number of product lines and buy more stylish product in greater depth. The expansion of food space has been slowed while we concentrate on refreshing the format and driving sustainable growth. Our international business has already been rationalised and we are now creating a competitive network of mainly franchised business in territories where we can grow.
Marks & Spencer chairmain announced formative changes in the organisation which is lead by functional directors. Food business is very different from the clothing and home. Our property assets need proactive management. M&S bank is clearly a very separate entity. We are moving heavy weight corporate structure toa family of parallel businesses. Each with shared brand values abut each led by its owen integrated management team.
M&S has a wonderful brand which most people in the UK still hold in great affection. great operator in the store,thirdly technical skills in both clothing and food and our understanding of quality, Finally, ingredients, sourcing, size remain outstanding.
The purpose of transformation plan is to restore the business to sustainable profitable growth. Board remains committed to maintaining the night balance between investment in the business, dividends for shareholders and balance sheet strength.
A strong corporate governance routines brought to the business much intellectual challenge and financial discipline. Finally at the time of declining profit it is the colleagues on the groud who bear much of the brunt of change. (Mr Archie Norman Chairmain)2018
Introduction and Background
M&S is a UK company that operates over 700 retail stores; its stock includes clothing, different food items and household items. M&S is the name of retail clothing store in Europe. The business was started in 1884. Its head office is located in Westminster, London and employed more than 80000 staff in the UK. The mission of M&S is to make as much profit as possible by selling garments and different food items products to customers. M&S Net income in March 2019 reported $25.70M and Revenue was $10.70M according to market watch report. M&S net income after tax reported £25.7M according to Annual Financial M&S Group PLC reports 2018.
Its objective to make sure that business has the right mind set of what they want to do. Aim is to increase profits through cutting variable cost to overcome decreasing sales of retail stores. Its mission to sell its food products in the market and getting opinion, review in the competitive market. Its competitors are Primark, Procter & Gamble, Debenhams, Lidl, Aldi, B&M. M&S has its culture which guides the organization behaviour in the changing internal
Organizational behaviour is defined as a field of study that explain the impact on individuals and behaviour within M&S. The concept is to applying such knowledge from managers toward improving organization’s progress through effective price strategy. Individual groups and the effect of structure on behaviour in order to make organizations work more and efficiently.
Determine of the current situation with Leadership and Management Practice
M&S has a great concept of Leadership in its retail stores and international stores management; it has a group toward the achievement of a vision or a set of goals. The source of this influence may be formal such as that provided by managerial rank in an organization. But not all the leaders are managers nor for that matter all managers leaders.
As a manager customer service, M&S should provide its managers certain formal rights to assure that they will lead efficiently. Marks & Spencer’s does need a strong leadership and strong management for effectiveness. We do need leaders today to evaluate the visions of the future and inspire organizational members. We also do need managers to formulate detailed plans create efficient organization structure. Leadership do play a central part in understanding group’s behaviour, because it’s the leader who usually directs us towards our goals.
Difference between Leadership Vs Management
According to him, Leadership is about aligning people to the vision, communication, motivation and Setting of targets is a technique of management. It is used to focus on certain activities. M&S have set sales statistics evaluation for every month; this exercise to work someone with the organization must show leadership by focusing the main characteristic activity. A leader must needs to coordinate with employees by showing how a target can contribute towards this aim.
Leadership needs to be clear and strategic but it is also needs to be collaborative both between and within the culture of M&S.
The Head of Learning, recruitment and organisational development at Marks & Spencer communicated to develop global leadership. Workshop aligned to international strategic vision of top leaders. M&S set out a three year plan with the aim of becoming a truly international, multi-channel retailer. Increasing number of employees will now working with international colleagues, suppliers and ultimately customers.
Organisation culture of M&S in UK
According to Huczynski and Buchanan, this is set of beliefs and attitudes of staff and management. It also influences the decision making and behaviour within the organisation. Furthermore he explained, its focus on the values, beliefs and visibility and accessibility by individuals.
Mullins (2010) said shared values which then produce norms that govern behaviour. Corporate culture is an assemblage of all shared values beliefs policies and attitudes which will be reflect on the people.
Marks and Spencer pattern in British retailer clothing, food illustrates the concept of hierarchical structure. Its culture is affecting the organizational performance.
In last five years due to high competition within the retailing industry in the UK, M&S main strategy has been redefined to focus more on innovation and customer service quality. (Business case studies 214). Power culture used by the company was not matching with these new objectives. Due to several management level involved in the decision making process a tall structure is not the suitable way to react its competitors. M&S is followed a flatter structure joined to a role culture. It is more decentralized and low formalization. The contacts between employees and clients will be more direct and as a result will develop their knowledge concerning customers need and behaviour. Each of them has a specific role which is started within the flat pyramid used by the company. It is also describe in the job description and rules. The type of obdurate culture of M&S is a customer driven culture. Where every areas of departments in the business make a real progress to customer service, market research, employing right people with training on work. Business is trying to update the technology and E-Commerce. It also has a positive impact on culture where staff and workers coordinate. There are always looking for new ideas which support organizational culture. It is also described briefly in the following way in this business report.
Marks & Spencer and its structure
Good communication from different areas of function is limited in order to facilitate decisions making and problems solving process. The rigidity of a hierarchical structure impacts on the level of creativity and innovation. of k. Both structures rigid and organic challenge is to increase organizations effectiveness and efficiency. The importance of organizations specific projects is the principal objective of a matrix structure.
Change to Organization Culture and Structure
M&S was a well established and famous in the competitive market. Its corporate culture was inflexible, rigid and resistant to change because it was felt that since the company was successful, there was no need to change. Flexibility in employee remuneration and working hours. However when it became clear that the old culture was unable to cope with changing market, the top management decided on a major revamp. (Robbins and Judge, 2007).
Employees became less resistant to embrace new ways of doing jobs. Employees were willing to work for longer hours if it meant better pay and they were res resistant to the fact that they might lose their jobs if the company performed poorly. They were also sent for learning and education programs to equip them with new skills. All these efforts contributed to the change in corporate culture which is now more dynamic and flexible structure.
The formal chain of command was flattened to a certain extent and in doing so the company became more responsive to the changes in customer demand and taste and innovation. Management structure was simplified to delegate more responsibility to individual store managers in their regions and to give them more autonomy.
Motivation of staff in M&S
An employee of the month award recognises employee that illustrate M&S values being innovative and inspirational. The award also acknowledges outstanding achievements by M&S workers who show passion and commitment to their co-workers. Each month workers submit their nominations to their line manager and one employee is selected from nominations. M&S offers staff performance incentives. Employees were informed that whichever store sold the most clothing or bottles would get a visit from head of beauty or regional manager. This engagement from teams and staff shared best-practice tips and ideas of how to drive sales on social media. Findlater says,
Decision making procedure
Strategic decision making is a continuous process that involves creation of strategies in order to achieve desired outcomes. It is detailed process which deals with all types of decisions taken by managers. (Elbannas, 2006). Researchers have emphasized on adoption of continuous approach of decision making according to changing environment. Manager of Food department have an objective of to increase its sales in the current period for household products and food. Clothing business of company generates about 49% sales whereas 51% sales of company come from food business. Strategic decision is also evaluated in the light of existing literature. The responsibilities and planning process of different authorities, top level managers of the company will be analyzed with impact on strategic decision making process. Products, Price, Place, Promotions, Profit decisions in changing market price of food items, environment analysed. They implement a strategy of offering low prices so that pizza restaurants get rise in sales volume. Managers review results of new strategy has rise in the production and sales volume. Controlling measures are taken by the management. Strategic decision making is a process of planning, organizing and controlling.
Financial Analysis
M&S has reported a fall in food and clothing sales. But little improvement in sales this year, 1.5% quarter drop in the September 2018 for clothing and 3% drop in food items was recorded.
Chief Executive Steve Rowe told BBC that food was trading behind our expectations. But retailers were reshaping its business with price lowered on hundreds of food items.
According to Dominic O’Connell business research report, 2018 M&S clothing in a slow slide, food a bit worse than expected, with like-for-like sales down nearly 3%. It’s a great matter of needs to be done to break the pattern. Fewer stores-100 will close- a better online offering and general tightening-up of management and structure. They can save more than £350m a year. M&S leasehold commitment on its store is 20 years it is also going faster in closing stores or shrinking them would be extremely expensive.
Director of Grocery Mr Steve Dresser explained that M&S can run a business on meal deals and 25% off wines forever but these things take time to back out off. Closures of stores will have impact on food and case they didn’t perform.
M&S plans to close 100 shops by 2022 as announced in May 2018. It is also vital move for its future. Mr Steve Rowe, Chief Executive said the retailers will be continued to review its store closure programme and did not rule out future closures. Third of its business would be online in the future. For broad range of customers a broad range of merchandise available that suits all their tastes. Its directors were not awarded bonuses last year because of disappointing results.
M&S new plan intends to have fewer larger clothing and home ware stores in better locations. It is also facing high competition from online stores and discounters such as Primark, P&G, Lidl, Aldi and Debenhams. According to David Jeary report $1.5bn worth of goods imported each year which equates of 65% of stock of M&S.
Finally, a change in M&S women clothing items pricing strategy which focus was to delaying its summer sale a week, accounted of 9% fall last year and clothing sold on promotional price. Its share price dropped 40% in the market; investors should be assessing impact of Mr Rowe plans on profitability and due to Brexit vote.
Current Situation and Analysis of M&S in UK
M&S could use analysis for setting its periodic short term sales targets. This analysis is a way of summarizing capital strength and weaknesses relate to external opportunities and threats. My view as a store manager for M&S retail store for clothing, opportunities do emphasis the following factors in this business report.
- Good communication
- Online Sales and know the audience
- Good Customer Service, Live Chat.
- Product video
- Leadership in stores
- Strong brand and Offer a guarantee
- Stay in the loop
- Best use of financial resources
Its strength is very effective to achieve its success in the international market. M&S can capitalize strength to avail external important factors and minimize its weaknesses.
M&S also have operational weaknesses that includes following factors.
- Only stock own brand
- Few outlets
- Not 100% global
- Capital
M&S could achieve its objectives of becoming leader in emerging markets. This needs in a strong commitment of organizational people. In order to achieve its objectives following opportunities are available, Growth of emerging markets (China, India,). Low cost countries have huge potential for company’s sales. Corporate strategy can expand its strong brand in these emerging markets.
M&S is also not free from threats; following factors need to be considering before making expansion in market.
- Competition
- Political issues
- Late entrance
Political issues could limit chances of its growth in China markets of Management of M&S managers do overcome its weaknesses and get success in those markets.
Conclusions and Summary
Effective online promotional communication strategy for M&S to achieve its objectives.
A change in the clothing quality through innovation policy can be helpful for Marks & Spencer.
Market growth and products development may enable company to enhance its global presence. (Ogden,s 2006).
*M&S have key functional areas are Human resources, financial distribution, Purchasing, customer service and Sales and Online Marketing departments will need review sales progress of clothing for long term period and need more improvements in price and quality strategy.
A flat organizational structure is good for small organizations; it is possible to decentralize some decision-making while corporate integrity is maintained.
It is hard for big business organization because it can result in loss of control of upper manager in the functioning of business.
It also helps to make sure the company runs smoothly. Customer driven culture encourages the customer needs. Management and leadership style is formal and to make important decisions to attain the desired objectives. Democratic style is useful when individual team work together for discussion being made by them. (Strinfellow, 2010)
The structure, culture, motivation are important for top level managers to make arrangements. Management style is all used to improve the way the company works towards its objectives. An increase in sales, value is possible through innovation and technological change in clothing. This approach brings a success to the company and change in people and the way that they challenge problems within the organization. (Stephen P.Robbins 2016)
Recommendations for improvements
Marks & Spencer for enhancing profits is to turn into a global brand by targeting its expansion strategy in the emerging markets of India and China. The Chief Executive of Marks and Spencer, Bolland, has said that the company opportunity in the form of emerging markets to move from UK retailer to an international retailer by reducing its dependency on the UK markets (Lara, 2011).
- Marketing Mix is also considered for the success of marketing strategies. 4Ps are having crucial place in the marketing strategies and its analysis, implementation from managers in the M&S.
- Food items price, location, online promotion of M&S and cutting flexible cost could contribute in its success in the new market.
- New clothing line to focus on value and quality and provenance. Develop new brand identities through innovation in production.
- Figuring out how to increase online sales, getting to know about your audience and building rapport with them.
- Provide commendable customer service M&S can boost store sales through product video.
- Use live chat, offer a guarantee and make your website easy and frictionless as possible.
- A CRO strategy will ensure that every aspect of your website is tailored strictly for your audience.
- A conversion rate optimization strategy is a way of optimizing each stage of your marketing funnel.
- Conversion rate optimization covers every aspect of your marketing footprint, does includes your website, blog, paid ads. Social media profiles, email marketing complains and mobile apps. There also video marketing and landing pages with forms and so on.
- Customer segmentation through digital marketing process in order to target your marketing messaging and overall campaigns.
- Managers should know profit margins from your sales when taken into context with your investments.
18.4.2019