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Bite-size Case Study

Marks & Spencer: the quest to master the new millennium

Published on July 31, 2016 Originally recorded 2009   7 min
0:04
Marks & Spencer is an example of an organization which had been very successful, then which lost its way. The question, of course, is why did this happen?
0:14
A first answer to the question why can be found in Stephen Cummings and David Wilson's framework of animation and orientation. Animation describes those factors which support enthusiasm for change. Ultimately, it determines whether or not there's lots of enthusiasm and commitment for the strategic direction or the change in question. Orientation looks at the goals and direction of change. Ultimately, this is a measure of clarity of strategic direction. Where is the change heading, and how clear is it to everybody involved? We begin our analysis of Marks & Spencer's by placing it in the bottom left-hand box, where staff have lost enthusiasm, have lost commitment for change, and at board level and strategic level, there's no direction or trajectory for organizational change.
1:07
The organization ended up in this bottom left-hand cell primarily because strategic thinking was flawed in the organization. The company had a long history of differentiating of quality. This was reflected in higher prices for goods which people were prepared to pay for the extra quality. But competitive advantage was very quickly eroded as new players such as Next and Gap came onto the fashion scene and began to beat Marks & Spencer both on price and fashion and attractiveness to consumers. Marks & Spencer's strategists thought they could compete. But the direction of change they chose, that orientation, proved a near disaster for the company. This slide outlines five reasons for the change failures. But there were many more. These five, however, are the main reasons why Marks & Spencer began to slide down into the bottom left-hand box of the Cummings and Wilson matrix. There were three underlying flaws. First, a decision to compete head on with a new competition. Secondly, trying to diversify and reduce costs simultaneously, that to a host of further problems, and the final flaw was continuing to view the customer base as undifferentiated. As the slide says, middle class, middle aged, and mostly female. All three were flawed.
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Marks & Spencer: the quest to master the new millennium

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