Marks & Spencer is most recognized British retail brands having 760 stores more 30 countries on the world, which was very successful in term of profitability and market share until the late 1990 and then its fortune turned to decline.
The report depicts about the competitive strategy behind its successful growth until 1990 and the highlights the causes behind its decline. It also suggests the future competitive strategy to sustain competitive advantage in current scenario.
Generic strategy described by Porter (1985) is being used to describe the competitive strategy while supportive corporate and value chain strategies also discuss that help to strengthened strategic competitive choice of Mark & Spencer.
Porter (1985) generic strategy framework describes that the traditional business formula of Mark & Spencer was partially near to the “Differentiation” strategic. M&S basis of strategy was quality which is the main essence of Porter (1985) generic “Differentiation strategy. Porter (1985) describes that to pursue “Differentiation” organization should be customer focus, pursuinge creativity, and innovation and use of , technology, should be supportive by decentralized decision making structure. M&S differ on the ground that it tried to pursue quality but through UK base supplier, centralized control, bureaucratic structure and culture which was is the main contradiction between Porter (1985) generic strategy and M&S traditional business formula. Moreover M&S was pursuing growth investment strategy to diverse its business internationally though joint venture and franchise business. M&S offer selective rage of quality products that was offered with the presumption that people like those goods which they known before.
After successful M&S face drastic decline that started during 1990. This was mainly due to traditional business formula in which close bureaucratic structure and culture restrict the management to think beyond the its own business theory as result M&S fail to assess rapidly changing environment forces i.e. legal, social, and economical and industry competitive forces. On the other competition quickly assessed such changingchanging and respond accordingly. Moreover it involved in aggressive investment growth strategy by using same traditional business formula without restructuring organization design and culture as result management focus just confined to day to day operation rather than long planning.
The environment analysis P.E.S.T., Porter (1985) five competitive forces, Stakeholder analysis supports that the M&S should remain continue to quality focus “Differentiation” strategy but it should be based customer focus to satisfy customer needs and wants. The strategy should be supported by value chain activity that helps to add value for organization and customer both. M&S pursue stable and retrenchment strategy to sustain stable financial position for the time being and as soon stability sustain pursue growth strategy. Initially it is suggested that pursue investment in vertical integration in value chain. M&S should redesign its structure and culture and it should be customer focus characterized by division in different business units, flat structure, decentralized decision making.
Strategic management is continuous iterative process that should be carefully manage at each stage i.e. environment scanning, strategy formulation, implementation, control etc. [pic]MARKS & SPENCER
Marks & Spencer is most recognized British retail brands having 760 stores more 30 countries on the world, which was very successful in term of profitability and market share and until the late 1990 and then its fortune turned to decline and crises. Marks & Spencer
Public (LSE:MKS,OTCBB: MAKSY)
Leeds, England (1884)
London, England, UK
Michael Marks, co-founder, Thomas Spencer, co-founder Industry
Clothing, food, household items,...
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