Marks & Spencers: the Downfall and Leadership Vacuum

Part A of this report examines the resources and capabilities of Marks & Spencer (M&S) up to the mid 1990's and how they lead to creating a superior competitive advantage (CA) over all competitors.

- Retailing industry change, Large chains were expanding their market penetration by offering a more diverse array of product.

Products and Services: McDonald has to continuously evolve its menu to meet the emerging customers need and to attract new customers. Currently, nutritional value has become very important for customers.

‘We aim to return the UK High Street Retail business to its role as Britain's most popular stationer, bookseller and newsagent … Our plans encompass improved efficiency through cost savings and margin enhancement, while rebuilding the competitiveness and depth of our product ranges.' (Ms Swann BBC, July 2005)

Sainsbury’s was founded in London in 1869 as one of the nations’ oldest retailers. It also provides a unique illustration of transformation that has occurred in retailing and in shopping and eating habits since the mid-19th century. It grew to become the largest grocery retailer in 1922, pioneered self-service retailing in the UK, and had its heyday during the 1980s. Now it is the third largest chain of supermarket in the United Kingdom with a share if the UK supermarket sector of 16.3%. The supermarket chain operates three store formats: regular Sainsbury’s store (“Main Mission”), Sainsbury’s Local and Sainsbury’s Central (convenience stores and smaller supermarkets in urban locations—“Mixed Mission”) and

While these departments created value by offering one-stop shopping, during difficult economic times, such as the downturn of 2008–2011, consumers tended to opt for value over such convenience. (Target Market)

customer needed and would outlast the current fashion and trends seen in other high street retailers. As it did not have fitting rooms till the 1990s, all assistants carried tape measures and M&S would give a “no quibble” refund to any customer who was unhappy with the product he or she had purchased. As its products remained in the stores all year round for most of its history it never held sales. The success of M&S continued into the 1990s. Richard Greenbury, the CEO from 1991, explained this success:

The quality of McDonald’s food has often criticized. Being high in sugar, salt and fat, the food is far from healthy. The business has tried to address this issue by adding healthier food options such as salads and yogurt to the menu. However, a recent scandal in China, were there are reports of expired and condemned meat being used and severed to customers has severely tarnished the company’s already poor reputation (The Economist 2015). This event also saw a massive drop in Sales in Asia as customers reacted to the scandal (Jones

21. Finally, the changes about marketing & service of M & S also added its competitive advantages. Initially, M & S built ‘St Michael’ as its quality sign of product so as to build customer loyalty and attract customers to purchase its products. However, M & S has to respond for the challenges for its competitors, such as Tesco, Gap, because M & S’s competitors has responded more fast for customers’

Tesco is British transnational corporation and in the same time the largest retail chain in the UK, where company manages more that 2700 shopping centers. The headquarter of the Tesco is situated in the city Cheshunt, Hertfordshire.

Marks & Spencer is one of the best well-known British department stores. It was founded by Michael Marks and Thomas Spencer in 1884 (M&S, 2014). It started as a market stall at Kirkgate Market in Leeds. Nowadays, M&S has transformed to an international multi-channel retailer with 798 stores in UK and 455 international stores (M&S, 2014). According to its annual report this year, it has earned a total revenue of £10.3 billions over the last year. (M&S, 2014)

Secondly, through the M&S.com website, it gives M&S flexibility to cater to customers’ changing shopping habits, whether they are shopping online via mobile, on a tablet, or at Shop Your Ways, and there over 7 million registered users. M&S.com produces £636.5m sales, 2% decreases than last year, this should be related to customers liked the enhanced functionality and cleaner look of the sit, as a consequence, when M&S updated its website, sales returned to growth in fourth quarter and it shows gradual improvement such as, weekly sit visits has obtained to £6.1m, 10.9% increased than last year, 22 new Shop Your Way Stores has be opened, and customer satisfaction rose by 18%. Thirdly, due to M&S is a international company, it has 480 wholly-owned, jointly-owned or franchised stores in 59 territories across Europe, Asia and the Middle East, 25 new stores were opened and 5 new territories were explored in the past year. In 2015, the international revenue is £1.1bn, it decreased by 5.7%, this condition should be of relevance to in a number of M&S franchise partners were impacted by political instability and local currency fluctuations which resulted in lower shipment in a geopolitically turbulent year. In other territories such as, the Middle East region, the macroeconomic situation has impacted consumer demand, but fortunately, these franchise partners have adapted to the challenging environment by managing their businesses prudently and ordering less stock. Finally, M&S

The rising cost of using British suppliers was also a burden, as rival retailers increasingly imported their goods from low-cost countries, but M&S's belated switch to overseas suppliers undermined a core part of its appeal to the public. Another factor was the company's refusal until 2000 to accept any credit cards except its own store card.[13] In addition, as an ageing and famously bureaucratic company, it was losing touch with potential younger customers, who were reluctant to shop with it. At the same time Greenbury, who had dominated the company, had his attention diverted by the Prime Minister's committee on directors' pay.

This report evaluates the leader’s dynamics by evaluating the leadership qualities of Spencer’s retail limited General Manager . The report determines effectiveness of leadership by assessing the leadership of Prasad GSN. An interview with him is scheduled, and the findings of the interview analyzed. Further suggestions and recommendation for better leadership are discussed afterwards.

In total retailing and in food retailing, supermarkets are dominant, confirm Reardon and Berdegue (2002). New World (NW) is a New Zealand supermarket chain. Independently operated and owned, the Devonport NW supermarket is an excellent example of how a retailer can use a retailing strategy, and the retail mix, to attract customers. This report examines the elements relevant to retailers, with particular reference to the Devonport NW Supermarket.