Marks Spencer

Topics: Supply chain management, Supply chain, Michael Marks Pages: 24 (9814 words) Published: February 27, 2015
This case was
prepared by Martin
Christopher and
Helen Peck of
Cranfield School
of Management,
Cranfield University
United Kingdom.

Marks & Spencer had long been the doyenne of British
retailing, its name a by-word for quality, service and value for money. Having turned in record profits for 1998 and
accelerated its global expansion plans, things suddenly went horribly wrong for the retailer. Out-of-touch management,
complacency in marketing and above all an ossified supply
chain were subsequently identified as root causes of the
retailer’s problems.
Marks & Spencer’s partnership approach to supply chain
management had made it a textbook favorite and the subject
of numerous magazine articles, almost all of them
complimentary. But how had things slipped so far without
anyone noticing and, importantly, what could be done to put
things right?
The case examines the events leading up to the retailer’s fall from grace, its management’s efforts to put things right and the results of their endeavors. It leaves the reader to identify the pitfalls in the course of action taken and to recommend

what changes might be made to retrieve the situation.


For managers at Marks & Spencer the year 2000 was turning out to be a less than auspicious transition from one century to the next. The previous 18 months had seen cadres of senior staff dismissed or redeployed in newly created posts with job descriptions that bore little resemblance to the ones they’d had before. Few would argue that the company had lost its way in recent times, becoming complacent and out of touch with the customer. Now though the company was fighting back with enticing new stores, products, services and a sophisticated new image. However, as newly appointed marketing director Alan McWalter had pointed out, it was going to take more than smart new store layouts to turn around the struggling giant.

“We won’t change M&S by changing a bag or the look of some packaging…First and foremost we have to say, ‘Have we got our stores in the right place with the right merchandise at the right time”. [Alan McWalter, Marketing Director, March 2000i] COMPANY BACKGROUND – THE 1890s TO THE 1990s.

Marks & Spencer was formed in 1894, when Russian émigré and successful market stall holder Michael Marks formed a partnership with Tom Spencer, a cashier employed by textile manufacturer I. J. Dewhirst. Marks’ first market stall had been financed by factory owner Isaac Dewhirst. The Marks & Spencer partnership had all the ingredients of a winning team, combining entrepreneurial flair with the commercial acumen required to develop a string of ‘Penny Bazaars’. In the 1920s the business went on to adopt the then revolutionary policy of buying direct from manufacturers, instead of through wholesalers. These unique supplier relationships gave the business an advantage that few of its rivals could match. In 1926, Marks & Spencer was floated on the London stock exchange. Two years later, it registered the St. Michael trademark, removing manufacturer’s own brands from its rapidly expanding chain of stores. By the early 1930s Marks & Spencer had established a presence on London’s fashionable Oxford Street. Soon afterwards, food departments selling canned produce were introduced into the stores. The company had by now acquired a reputation for excellent service, quality, and value for money. During the Second World War (1939-1945), the British Government turned to Marks & Spencer for expertise when setting up its wartime Utility Scheme, a program designed to bring clothing of dependable quality within the reach of everyone. Marks & Spencer was by now a British institution.


In 1973 the company opened its first overseas store in Canada and in 1975 it ventured into Europe, opening stores in two Continental European capitals, Paris...
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