FACULTY OF ENGINEERING & COMPUTING

Marks & Spencer

Name: Davis D Parakal

SID : 3357394 Module : M22EKMModule Leader : Ray Wood

5/16/2011

Table of Contents Page

Introduction 3

SWOT analysis 3

Vision and mission 5

Organizational culture and structures 6

Training and motivation 9

Change management plans 10

Future plans and development 13

Conclusion 15

Introduction

Mark and Spencer is one of retailer business firm which is much known for its trading and success. Currently holding 700 retailer stores all over United Kingdom and 300 in other countries. Its operations spread over more the 40 countries all over the world. M&S started the business in Leeds by selling cloths with high quality and moderate price in 1884. Now they have business that deal with food, clothes and retailer products. They are well known for their quality and management model. It was once model for all the retailers in Europe. Mark and Spencer achieved £1bn pre-tax profit in its successful growth. So Mark and Spencer (M&S) was described as a managerial giant of the western world .(Drunker, 1974).

As you can see in the graph and table M&S suffered a huge fall in its profit in the period 1998- 2004. This report is discussing the reason for that and also finding the changes happened to make it back to the success track. The industrial organization indicate that management failing firms are unfortunate victims of

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external circumstances and not imply management inefficiency (Melawi et al,2002). So we are discussing these factors soon.

Swot ana l ysis

Before analysing rise and fall of Marks and Spencer I am doing a SWOT analysis of this organization to find out the strength and weakness of it. SWOT analysis is a method to study about organization environment and position.

When we talk about the strength of mark and Spencer the most important factor is its brand name and reputed business in UK for decades. Along with this name they always prioritise customer satisfaction. Always take back the goods if they are not satisfactory for customers. So apart from any other marketing it creates a Mouth-to-Mouth advertisement among customers and it is meant to be the strongest way to advertise. Also in the recent years Mark and Spencer shows more importance to sustainable products and concept. This is the organizational strategy to keep the social responsibility. This will reflect in the business in two ways, one cost reduction techniques and other in customer satisfaction will increase.

Helpful Harmful

Internal

Strength Weakness

Brand Name

Customer satisfaction

Social responsible – Sustainability

Global business – Utilize more market

experience

Weak return on invested capital coupled

with high pension and dept deficits

M&S legacy stores and systems are a

competitive disadvantage.

Not attractive for economical valued

customers

High competition in food market

Frequent Management change

External Opportunity Threats

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Making China and India a centre of

attention can lead to expansion in two of

the fastest growing markets

Online shopping continues to flourish in

the UK and will enable M&S to increase

revenues

Utilize Social media marketing

Pension funds deficits will lead to

constraint in the availability of money for

other operations and expansions

Price increase in clothing and VAT

increases will lead to less spending by

customers

UK economical issues

Coming to the weakness and threat Marks and Spencer had a great fall in its business due to some of those factors. Some are persisting but some are eliminated in last 4 years. Considering the Human resource division the pension polices always making head ache to M&S. And there was a major impact of frequent management changes in M&S made the problems more badly in that period of fall. The current economical constrains effected M&S and it made then to cut the jobs and it made an impact with the job seekers and made an in security among employees in mark and Spencer. Also the strategic changes implemented by the organization had so many issues with the working force and the deny the acceptance of new changes.

When we consider the middle class and just below middle class, they always kept a distance from M&S because of the price affordability. The food materials available in M&S stores were comparably higher price when we compare it with prominent food market like TESCO, Sainsbury’s. (Ocr, 2002). Also a new issue is rising up is stock management problems with the online shopping customers. They got delayed delivery and issues like that in the shopping. Considering the opportunity ahead is lot, one of the main contributions to the business can be provided by expanding the market space into growing countries like India and China. Also the production centres can also be considered in these countries considering the low labour cost and production cost.

Utilizing the technological advantage like Social media and M-commerce is the next major opportunity before mark and Spencer. They already have a very good business start with the online platform. Since this system to the more modified and more effective stock management and delivery should be promised to the customers. And apart from online shopping the emerging platform is social media like Facebook, Twitter, Youtube, etc... Mark and Spencer already starting utilizing this platform well. But need to move much forward in this way of marketing. The two main advantage of this platform is fast reach to viewers and it will create an interactive advertisement platform rather than old one side advertisement

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method. Platform like Twitter and Facebook even create a platform that enable B2C (Business to customer) form of business opportunity. Also it induces a mouth to mouth advertisement among connected customers of M&S. I recommend them to utilize this platform by investing more resources and money to develop company strategies for Social media marketing.

Vision & mission statement

Mission - To make aspirational quality accessible to all

Vision - To be the standard against which others are measured

Marks and Spencer’s have been known for their quality value, service, innovation and trust .Mission of the company is to build the ‘sustainable business, through consistent, profitable growth and make sure that customers and wider stakeholders can always trust company’. Marks and Spencer aim is to do the right thing the right way.

Mission of Marks and Spencer emphasizes primarily on quality, making clear to everybody that quality is most important priority of the company. M&S wants to be seen as offering really high quality goods at a very affordable price which in turn leads to the consumer receiving good value for money. Marks and Spencer focuses on quality of their products. Starting from the first quarter of last century, until today, the quality is the guiding principle of the company, with it, it is first associated the name of Marks & Spencer. Why Marks & Spencer products have as good quality? Because the company creates them based on high quality semi-finished materials and before sale is subjected to numerous researches and testing. Moreover company also pays attention to the persistence of clothes. This is possible because developed by Marks & Spencer Technologies lifting strength of materials. Company spends as much time and energy to prepare and test their food. Important goal on that level of business is to produce healthy food. To achieve it Marks & Spencer is working on eliminating from its food preservatives, harmful fats, excess salt and sugar.

To meet customer expectations Marks and Spencer continuously develops new technologies in production of their products and new fabrics. Beyond the quality and

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development of new technologies, the brand Marks & Spencer are also care about the environment, trade on fair terms , organic products and promoting healthy lifestyles. All these activities shape brand image of the Marks and Spencer. Thanks to this company is known as a company which sell good quality product taking into account good quality, persistence and environmental issues.

There are many companies which look up to M&S and measure themselves against them, helping their company to improve and gain more customers.

Their primary focus is to understanding and meeting the customers’ needs consistently, in an increasingly competitive retail environment. Marks and Spencer placed real importance on creating a place to work that inspires and rewards the colleagues properly. They want the workforce to reflect the diversity of the people that shop with Marks and Spencer. The approach to Corporate Social Responsibility (what very important is for Marks and Spencer underpins their commitment to Quality, Value, Service, Innovation and Trust.

Organisational Structure & Culture

Creating a well defined structure and culture for the organization deliver the objectives and

goal of the company more quick and efficient. Structure mainly says the flow of reporting to

the senior manager through line mangers and middle level managers. This flow can be

arranged in different ways according to size, location, policies and goal of the company.

Most of the company didn’t create a structure in one implementation. I mainly happen in an

evolution process. The team that work for a particular function will come under

departments and decision makers form the manager layer and controlling strategies for

senior management. Any sudden change in this structural change will reflect in business and

it will be denied by employees.

Four main factors affect in the formation of organization structure. According to stewart

(1996) these can be:

Size of organization

Technologies used

Access to supplies or row material

Location of customer

Stewart J & McGoldrick J (1996)

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Also these factors decide different type of structures. In the case of mark and Spencer it had

an old structure which was very hierarchal and divided the organization into so many sub-

braches. But after the arrival of leaders like Stuart Rose this system completely changed in

to a new form. This is very similar to a bureaucratically form of structure and they call it as a

flatter structure. Employees especially mangers posses more responsibilities and decision

power in this new form.

M&S Structure-The times now (2007)

Apart from this, we are going to discuss about most common type of organization

structures.

1. Functional 2. Entrepreneurial 3. Divisional 4. Independent 5. Matrix Pilbeam, S. and Corbridge (1998)

Functional

Functional structure is simplest among these. It divides the organization according to the

functions like Human resource, Research and development, marketing, Technical. This can

categorise the function as well the skill set of the employees working the in the

organization. Main advantage of this organization is categorising activities and avoids

duplicate or multiple working among employees. Also the expertise can be shared when all

working under the same skills. But some common disadvantages are communication

problem and departmental conflicts. Since each act as different departments in the

structure there will be a competitive mind and as well as communication gap. This problem

creates issues between departments.

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Entrepreneurial

These structure circle around one central point. It can be CEO of the company or single owner of the company. This central point or small team will be the highest power in the organization that takes almost all the decisions. Main advantage in this organization is quick decision making process. And they can respond quicker to market changes. But same as the advantage serve the dependency of this single point in organization.

Divisional

This is suitable mainly for large type of organization. This can be divided among regions or different businesses in the organization. For example, Asian region, Europe region, African region etc... But this creates duplicate resource for different divisions.

Independent

This is a collection of independent business or organization under one large structure. For example subsidiary companies.

Matrix organizations

Matrix organization behaves as if its name says. There will be two layers of managers, one

horizontal way and another vertical. This mainly happen when organization split project

team under each division of the organization. This utilizes the resources in its best way. And

also balance the conflict common goal. But disadvantage is increased conflict among project

team and confusion and pressure from two different layers of managers

Training and Motivation

All mangers in M&S possess a well defined career profile. Also they can plan the profile for the next appraisal. This is known as target role in mark and Spencer. They will get support in

maintaining this target profile and get desirable training to reach the target. There are mainly two type of training in marks and spencer. On-the-Job training and Off-the-job training. One is taking place in the work place with the help of colleagues and next level managers and employees.

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Other one as name suggests it happen in off job. On-the-job training also involves practical learning. This could mean being involved in a range of projects to improve technical skills and business competencies. The key to this training is to get Marks & Spencer employees ‘to enjoy their work and feel they have all the skills they need to do their job to the best of their ability’. An important way of increasing skills is performance coaching. This is a form of coaching by line managers. They review a person's performance and give feedback on their strengths and any development needs. Together, they agree how to improve and identify the opportunities to demonstrate these skills in their own jobs. The coaching gives the trainees confidence and is a successful element of the training programme. Marks & Spencer uses a range of different methods to help its employees with off-the-job training. For example, within the organisation there is an intranet. Staff can find learning materials on this that enable them to develop their technical skills and business competencies. Other resources for training and learning include workbooks that are used by staff, often for open learning. Workshops and other more formal activities provide opportunities for employees to practice their skills with the opportunity for feedback from other staff.Some common training techniques used in industry are mentioned in the below table:

Technique Suitability Disadvantages

Lecture Suitable when a large amount of information

needs to be given to a large number of people at

the same time.

Lack of participation from the

audience.

Role Play A small group acts out real work situation. The role play may not be taken

seriously or trainees are too

nervous to perform the role.

Group

Discussion

Useful when there are varying opinions about

issue, or a range of ways in which a situation

could be handled.

Trainees may wander too far

from the subject.

Video/Film Used to show a real situation. Little involvement from the

audience.

Project Setting a task to show case trainees

creativity/initiative.

The project has to be about

something that will interest the

trainees.

Case Study A case study provides the opportunity to examine

a situation in detail yet be removed from the

pressure of the real work situation.

It may sometimes seem easy &

trainees may not fully appreciate

that in real-life situation there

may be more complex issues to

take into account

Computer-based

Allows trainee to work at their own pace through a series of exercises using computerized training

The tool might not be user-friendly.

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tool. Guided reading

A series of recommended reading. Trainee may not be encouraged to research further.

In-tray Exercise

Trainees are given a series of files, memos &letters similar to real work situation and they need to decide on the appropriate action to take.

The content of the in-tray may not be realistic.

Change management Plan

Change received by human being posses the wave you show in the figure. It has got a positive cycle and negative cycle. This is the basic moods when we react to a change in our life. Its starts with uninformed optimism ,this is a positive phase that people look forward very surprisingly into the coming

change and eagerly anticipate the upcoming change. This is a positive happy period in the change cycle.

Informed pessimism goes under the negative phase and it’s the time of agony and stress towards the change. The new change will change the easy relaxed stage he had in the past and will start disturbing his routines in the life. People mainly start denying the change in this stage. This pushes them over into a period of gloom when they realize that perfection, after all, is not that easy to attain. Informed optimism, Before long, however, their original optimism starts to reassert itself, now tinted by a resignation to the reality of the situation. After all, things are not that bad, and a positive sense of potential begins to creep back. As they look around them and talk to other people, they make realistic plans and move forward with an informed sense of optimism. Completion Eventually, things reach a relatively steady platform of realistic and workable action. The person is probably happier than they were before the change started and, with their realistic vision, have the potential to reach giddier heights of happiness as they achieve more of their potential.

Key stage in the successful management of change:

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(Kotter, 1996)

1. Establishing a sense of urgency

2. Creating a guiding coalition

3. Developing a vision and strategy

4. Communicating the change vision

5. Empowering a broad base of people to take action

6. Generating short term wins

7. Consolidating gains and producing even more change

8. Anchoring (institutionalizing) the new approaches into the culture

(Kotter, 1996)

In mark and Spencer this mainly happened after the great fall of the company. Stuart Rose joined the company with new style of management. He made the proper way to implement the changes in the organization. “Rose started the change process with a core team of trusted people he had worked with - and he knew their strengths. Rose brought with him the Executive Director of IT, Supply Chain, and Property, and the Executive Director of Marketing and Store Design. With this core team, Rose was "able to hit the ground running” (Ann Rippin, 2005). He used a similar type of change management model suggested by Kotter. In Rose’s strategies he implemented the change emphasising these five points.

1. Emphasising the critical need for change

2. Developing a Core Team – Executives from (IT, Supply Chain, Property, Marketing Store & Design)

3. Provided a simple, accessible and operational guiding vision for improvement

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4. Micromanagement : Top management involved in operational day to day meetings

5. Reduced and changing strategic consultants for making plans simple

After the great dip in revenue Stuart rose convinced the team about the urgency of changing plan and strategies. This understanding of urgency of change itself brought a positive platform for change. One big advantage of this is lower reluctance for change in organization. Till then IT was not a part of core in M&S. He included IT department into the core team and started discussing new plans keeping easiest way use new technological approaches. This was first made internal issues in the organization but later accepted by the company

The centralized management system missed the feedback from individual stores some times. So Rose implemented a micromanagement model into the organization where top managers will involve in individual store and day to day operations. Also there were so many analysis procedures in M&S Spencer to determine the trend in the market and planning the upcoming season. This process was mainly based on surveys. He reduced this type of analysis and introduced new methods to analyse the market and trend. He brought a positive wave inside the company avoid the changes he implement. Apart from that below showed table discuss about the common practises to avoid the resistance to change in organizations.

Tactics for dealing with resistance to change (Kotter et al 1986)

Tactic Most appropriate used where

Advantage Disadvantage

Education and or communications

Resistance is based in the lack of information or inaccurate information and analysis

Once persuaded people will often help with the implementation of the change

Can be time consuming if large number of people are involved

Participation Initiators do not have all the information needed to design the change and where others have considerable power to resist

People who participate are usually more committed to implementing the change. Any relevant information that participant have will be integrated into the change plan

Can be very time consuming. participants can design in inappropriate change

Facilitation and People resist because of No other tactic Cab be time

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support adjustment problem that are involved

works as well where there are adjustment problem

consuming expensive and still fail

Negotiate Someone or some group will clearly lose out in a change and where they have considerable power to resist

Sometimes a relatively easy way to avoid major resistance

Cab is too expensive in many cases. Can trigger other group negotiations

Co-operations There is specific situation in which other tactics are too expensive or infeasible

Can help generate support implementing a change but less so than participation

Can create problems if people recognise the co-operation

Manipulation Other tactics will not work or are too expensive

Can be relative quick and inexpensive solution to resistance

Initiators are likely to lose some of their credibility and this can be lead to future problems

Coercion Speed is essential and change initiators posses considerable power

Speed con sometime overcome a great deal of resistance

Risky: can leave people angry with the initiators

Future plans and development

IT Plans

Implementation of latest process improvement tools is going on in M&S now. For example Capability Maturity Model Integration (CMMI) is a process improvement approach whose goal is to help organizations improve their performance. CMMI can be used to guide process improvement across a project, a division, or an entire organization

Also marks and Spencer started utilizing the latest media like mobile and social media into its operations. One recent example was WAP marketing and m-commerce.

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They implemented the mobile location search and product comparison in the WAP sites and got a high response from the users.

Plan 2010-2013

The main aim of Marks & Spencer is to ‘be the world’s most sustainable major retailer by 2015. To gain this in 2007 Marks and Spencer has introduced a new strategy called Plan A. Plan a Strategy is 100-point plan to improve the sustainability of the business.

The issues tackled through Plan A fall into three categories: people – its own employees, and those employed in its supply chain; products – with an emphasis on producing high quality, value for money goods that have positive environmental and social benefits; and community – recognising the company’s role in helping to create and maintain good places within which to work and live.

The main objectives of which Marks & Spencer set in the PLAN A and have already realized include: reducing the amount of waste generated by factories and stores of Marks & Spencer, protection of natural resources of the earth (through greater use of recycled materials), promotion of healthy lifestyles, promoting and applying the principles of Fair-trade, greater diversity of organic products, creating new jobs, the use of technology to counteract the adverse climate change and protection of animal rights (withdrawal from the offer of natural furs and cosmetics tested on animals)

Plan 2013-2020

Expanding business into other countries and raise a sale increase of 30%

Conclusion

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Pillars of Plan A:

1. Climate change

2. Waste

3. Natural Resources

4. Fair Partneship

5. Health and wellbeing

6. Involving customers in Plan A

7. Make Plan A how we do business

Issues

People

Products

Community

The report studied about human resource management key factors likes organizational structure, culture, and polices. It analysed the case of Mark and Spencer to deliver the practical implication of each topic discussed above. The main learning outcome was the change management objectives and possible models for effective change management. It compared the recent model implemented in Mark and Spencer under Stuart rose’s leadership. We compared the implementation to a scientific change model from Kotter. Report also discussed the future plans from Marks and Spencer.

References

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M&S (2009). Quality worth every penny Annual report and financial statements [online] available from <http://corporate.marksandspencer.com/file.axd?pointerid=c25b7670e6e4420abd2403cb7a6149f4&versionid=c6167e6e5dc44b918eb9a277b921fa23>. [16th March, 2011].

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Annual Report [online] available from <http://annualreport.marksandspencer.com/brand-and-marketplace/our-brand.aspx> [24 March 2011]

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