Marks & Spencer (B)
Marks & Spencer (B)
Case Study
Nardine Collier
The case study continues the story of Marks & Spencer, the previously successful British retailer which had run into a series of strategic and financial problems in the late 1990s and early 2000s.
This case examines the attempts of two CEOs, Roger Holmes and Stuart Rose, to turn around the company’s fortunes with very different approaches.
Michael Marks began one of the world’s most recognised brands by establishing a penny bazaar in
1884. The phenomenal success of the business led Marks to seek a partner; he chose Tom Spencer.
From this partnership Marks & Spencer (M&S) steadily grew, but by the early twenty-first century its success was running out.
Hitch in the formula1
Until the late 1990s M&S was highly successful in terms of profit and market share. This was achieved by applying a fundamental formula to its operations, which included: simple pricing structures, offering customers high-quality, attractive merchandise under the brand name ‘St Michael’, working with suppliers to ensure quality control, and providing a friendly, helpful service. This was enhanced by a close-knit family atmosphere in the stores, which was compounded by employing staff whom M&S believed would ‘fit in’.
Throughout most of the 1900s M&S was led by family members, who favoured close control and meticulous attention to detail. Central edict was given for purchasing, merchandising, layout, etc., hence every M&S was identical, resulting in a consistent image and guarantee of standards.
M&S stocked generic ‘essential’ clothing, and priced its products at a ‘reasonable’ level, while emphasising their high quality, a claim based on its insistence of using British suppliers.
M&S’s problems crescendoed in 1998 when it halted its European expansion programme, announced a 23 per cent decline in profits, and suffered decreasing customer satisfaction. Richard
Greenbury (CEO) blamed this on a loss of market share to
Case Study
Nardine Collier
The case study continues the story of Marks & Spencer, the previously successful British retailer which had run into a series of strategic and financial problems in the late 1990s and early 2000s.
This case examines the attempts of two CEOs, Roger Holmes and Stuart Rose, to turn around the company’s fortunes with very different approaches.
Michael Marks began one of the world’s most recognised brands by establishing a penny bazaar in
1884. The phenomenal success of the business led Marks to seek a partner; he chose Tom Spencer.
From this partnership Marks & Spencer (M&S) steadily grew, but by the early twenty-first century its success was running out.
Hitch in the formula1
Until the late 1990s M&S was highly successful in terms of profit and market share. This was achieved by applying a fundamental formula to its operations, which included: simple pricing structures, offering customers high-quality, attractive merchandise under the brand name ‘St Michael’, working with suppliers to ensure quality control, and providing a friendly, helpful service. This was enhanced by a close-knit family atmosphere in the stores, which was compounded by employing staff whom M&S believed would ‘fit in’.
Throughout most of the 1900s M&S was led by family members, who favoured close control and meticulous attention to detail. Central edict was given for purchasing, merchandising, layout, etc., hence every M&S was identical, resulting in a consistent image and guarantee of standards.
M&S stocked generic ‘essential’ clothing, and priced its products at a ‘reasonable’ level, while emphasising their high quality, a claim based on its insistence of using British suppliers.
M&S’s problems crescendoed in 1998 when it halted its European expansion programme, announced a 23 per cent decline in profits, and suffered decreasing customer satisfaction. Richard
Greenbury (CEO) blamed this on a loss of market share to