CASE TEACHING NOTES
Marks & Spencer
Nardine Collier and Gerry Johnson
This case study is about why one of the world’s most famous retails, Marks & Spencer, ran into trouble at the end of the 1990s and how it attempted to manage a programme of change to overcome those problems. It is therefore useful to explore issues concerned with organisational culture, strategic drift, strategic choice and the management of change. The case covers both the history of Marks & Spencer throughout the last century and, in more detail, from 1998 to 2004, the period when it moved from a position of market dominance to one in which it was deemed to be a take-over target. The case charts the attempts by its different chief executives to address the problems during this time and, therefore, the various change initiatives that were mounted.
2. Position of the case
The case study relates, in particular, to the problems and means of managing strategic change in Marks & Spencer. So it is particularly related to the coverage of strategic inertia and strategic drift in chapter 1 and programmatic design and change in chapter 10. With this in mind it might be taught at the end of the strategy course. However, it could also be used as a case to require students to analyse the reasons for the problems of Marks & Spencer, not only in terms of organisational culture, but also in terms of the market and competitive position of the firm. In this sense it could be used as a strategic analysis case earlier in the course. It also poses the question of the strategy that should be followed to regain competitive advantage, and is therefore also concerned with strategic choice.
3. Learning objectives
The case study requires an understanding by students of some important concepts and tools. In particular: •
the concept and the causes of strategic drift (chapter 1)
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how this links to organisational culture, and therefore the cultural web and its relevance (chapter 4) the concept of differentiation: what it means and what it does not mean (chapter 5) incremental versus transformational change in organisations: and the challenges associated with each (chapter 10). the feasibility and practicalities of designed strategic change in organisations (chapter 10) the role and style of strategic leaders (chapter 10).
4. The teaching process
One of the benefits of this case is that almost all students (UK at least) will have heard of Marks & Spencer, and very likely will have personal experiences of it. They may well also have personal views about the reasons for its demise. However, care must be taken that it does not override a reasoned understanding of the background of Marks & Spencer and some of the documented rather than personal evidence to do with the organisation. Nonetheless, the personal experience can be useful in generating discussion in class, and even as data in relation to some of the problems experienced by customers. It is useful to begin the case discussion by getting students to recognise the huge success of Marks & Spencer for most of its history, and to try and account for that success. This might be done by raising the question of why and how it achieved a position of competitive advantage in relation to other retailers. The class session can then move on to discuss the reasons for the problems it faced in the late 1990s; what strategy it should follow to overcome these; and finally the attempts to manage change that the management undertook in the 2000s.
1. Why was Marks & Spencer so successful? 2. What was its basis of competitive advantage? 3. Why did Marks & Spencer suffer its downturn in performance in the late 1990s? 4. What competitive strategy should Marks & Spencer seek to follow? 5. Evaluate the change initiatives mounted since the departure of Richard Greenbury.
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