After years of ever-increasing profits, the ailing British retailer Marks and Spencer (M&S) has fallen out of favour with British customers. Sales and profit strongly declined, followed by shakeups in the top management team. M&S faced extinction when confronted with Philip Green′s takeover plans. Top management have made efforts to turn M&S around. The analytical approach to assess these efforts is as follows:
Having evaluated turnaround models (Chapter 1), I will observe actions undertaken by M&S (Chapter 2), finally putting both sides together, determining if the actions fit the model (Chapter 3). Introducing competitive advantage as the measurement for success (Chapter 4), the conclusion (Chapter 5) will show that M&S is just one example for a problem that goes far deeper.
Table of Contents
Introduction: The Analytical Approach
Chapter 1: The Theory on Corporate Turnarounds
Chapter 2: M&S's Actions
2.1 Definition of an appropriate timeframe
2.2 Process of evaluation of key actions
Chapter 3: Matching Theory and Practice
3.1 So which case example fits the M&S case?
3.2 So which stage of the model is M&S in?
3.3 So where is M&S standing now?
Chapter 4: Competitive Advantage As the Measure For Future Success
Chapter 5: Conclusion: So will they succeed?
Objectives and Topics
This individual assessment aims to evaluate the strategic turnaround efforts of Marks and Spencer (M&S) during a period of crisis, utilizing established corporate turnaround models and the concept of sustained competitive advantage to determine the likelihood of the company's future success.
- Analysis of corporate turnaround models and their applicability to M&S.
- Evaluation of specific strategic actions taken by M&S between 1998 and 2000.
- Assessment of M&S's current strategic position relative to the "sharpbender" model.
- Examination of sustained competitive advantage as a requirement for long-term recovery.
- Critical reflection on the necessity of radical paradigm shifts for corporate survival.
Excerpt from the Book
Chapter 3: Matching Theory and Practice
After the profit and sales decline had been announced (November 1998), a boardroom struggle set off. M&S sought for excuses and blamed almost everything: the weather, the pound, overseas restructuring, suppliers – and even its customers! So it cannot be a case A company, as this case type immediately takes measures when it recognises a fall in desirable results.
It was not until July 1999 that the fist measures were taken. This however, affected optical appearance of shops and attraction of new customers only and did not change the way M&S did business. Philip Green’s takeover plan sees M&S approaching corporate death. So possibilities B, C and D remain.
M&S, however, survived. So case B has to be ruled out, as this case equals failure. Cases C and D remain. However, M&S’s actions began far too late to fit into case C. Only when they faced extinction they began to take measures. This indicates that M&S is a case D company. Yet it is not clear that their actions will be successful, as I will show in Chapter 4&5. So it could easily be that M&S becomes a case C company.
Summary of Chapters
Introduction: The Analytical Approach: This chapter outlines the scope of the assessment, identifying the decline of M&S and proposing a multi-chapter framework to evaluate the company's turnaround efforts against theoretical models.
Chapter 1: The Theory on Corporate Turnarounds: This section reviews existing turnaround models by Slatter, Bibeault, and Grinyer/Mayes/McKiernan, selecting the "sharpbender" model as the most appropriate framework for analysis.
Chapter 2: M&S's Actions: The author defines the observation period from 1998 to 2000 and applies a statistical evaluation method to identify the most significant strategic actions taken by the company.
Chapter 3: Matching Theory and Practice: This chapter compares the timeline of M&S’s actions against the phases of the "sharpbender" model, ultimately categorizing M&S as a "case D" company.
Chapter 4: Competitive Advantage As the Measure For Future Success: The author introduces the resource-based view and Porterian analysis to argue that financial metrics are insufficient for predicting success, emphasizing the need for sustained competitive advantage.
Chapter 5: Conclusion: So will they succeed?: The paper concludes that M&S's current actions only address symptoms rather than the root cause, arguing that radical strategic reorientation is necessary for long-term survival.
Keywords
Corporate Turnaround, Marks and Spencer, Strategic Drift, Competitive Advantage, Sharpbender Model, Corporate Strategy, Retail Industry, Crisis Management, Resource-Based View, Organizational Change, Business Performance, Strategic Assessment.
Frequently Asked Questions
What is the primary focus of this paper?
The paper focuses on evaluating the strategic turnaround efforts of the British retailer Marks and Spencer (M&S) during its crisis period in the late 1990s and early 2000s.
What are the core thematic fields covered?
The core themes include corporate turnaround theory, strategic management, competitive advantage, and the evaluation of corporate restructuring processes.
What is the primary objective of the assessment?
The goal is to determine if M&S's recovery actions fit established academic turnaround models and whether these actions are likely to secure a sustainable competitive advantage for the future.
Which methodology is employed in this research?
The author uses a comparative analytical approach, matching M&S's real-world actions against the "sharpbender" turnaround model and applying a weighted statistical test to evaluate the importance of specific managerial interventions.
What topics are discussed in the main body?
The main body examines various turnaround theories, selects the most suitable model, applies it to M&S's specific actions from 1998 to 2000, and discusses why traditional retail strategies have led to "strategic drift."
Which keywords best describe this study?
Key terms include Corporate Turnaround, Marks and Spencer, Strategic Drift, Competitive Advantage, Sharpbender Model, and Organizational Change.
Why does the author classify M&S as a "case D" company?
The author classifies M&S as "case D" because the company only initiated turnaround measures after facing near-extinction, and these actions were reactive rather than proactive.
What is the author's final conclusion regarding M&S's success?
The author expresses pessimism, arguing that M&S's actions merely alleviate symptoms and fail to constitute the fundamental strategic shift required to create a new, sustainable competitive advantage.
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- Marcus Matthias Keupp (Autor:in), 2001, Turnaround as a key strategic issue in times of crisis, München, GRIN Verlag, https://www.grin.com/document/7762
