Poor strategy


Has a poor strategy resulted in the failure of Marks and Spencer?

Research objectives

My objective for the research is:

Has a poor strategy resulted in the failure of Marks and Spencer

I am going to investigate whether an inappropriately planned strategy, partially focusing on internationalization strategy, has resulted in the failure of the Marks and Spencer firm. Failure of a business can be measured in different ways depends on the prospectors' outlook and what they benefit from the business, however I a m going to investigate failure depending on decreasing amount of stores and the value of shares of Marks and Spencer. These aspects are important because if stores are closing or not generating profit over a few years it is therefore causing a loss and a contribution to the failure of the firm. Share prices are also a measure of whether a business is failing or not because a decreasing share price shows a loss of value of the business. A decreasing share prices is unattractive for possible shareholders as it doesn't guarantee them good future dividends.


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The 1st hypothesis for this research is did the strategy plan for Marks and Spencer (M&S) cause failure and therefore closure of some of their stores.

The 2nd hypothesis for this research on M&S is did the strategy plan result in a negative effect on shareholders and share value.

Some factors that I will need to consider in helping in the research and to measure if failure is apparent in M&S are:

* Amount of worldwide stores

* Amount of current store closures

* Expansion

* Communication between stores and headquarters

* Amount of shareholder

* Current and previous share prices


For my investigation I needed literature pieces to support in the research of M&S's strategy, previous and current business information. I collected the needed literature pieces through Google Scholar, reports and also websites that were obtain through Yahoo and Google search engines.

Literature pieces have come as useful during research, however the piece that was of most help was “Retail internationalization and retail failure: issues from the case of Marks and Spencer”. This was a literature piece written by S.L.Burt, K.Mellahi, T.P.Jackson and L.Sparks.

Some articles of Maggie Urry from the financial times website, www.ft.com , are in relation to M&S. Urry's articles are a good source of information as In her work she discusses different issues within M&S concerning their suppliers closure, falling shares, competition and comparing competitors position to M&S, and also other issues threatening the companies stability and performance. Urry's work was also quoted in the literature piece, “Retail internationalization and retail failure: issues from the case of Marks and Spencer”, were she talked about how international expansion can cause the failure of many successful retailers including M&S.

Drucker (1974) in the past mentioned M&S in his work as he appraised the effectiveness objective setting techniques and management strategy adapted by the company that made it a success and a quickly growing UK retailer. Drucker used his research of M&S when writing his book ‘Managing for Results' and apparently he repeatedly mentioned about M&S‘s managerial technique continuously throughout 30years after his original study of the company. However recent noticeable unsuccessfulness of M&S shows that their previous strategy was more successful than their new strategy plan as within their old strategy they were rapidly growing in size.

Sternquist and Kacker (1994) looked at the ‘vanishing borders' of expansion between European countries, in their book ‘European Retailing's Vanishing Borders'. They state that international expansion has becomes easier between European countries as Europe has become more integrated and eventually eliminated physical, monetary and technical obstructions, however differences in culture and languages within Europe still remain an issue. This has resulted in Europe becoming an outsized market. The strategic alliances within European retailers are examined also within their book. This book is a useful source of information as it can help in comparing strategies of successful retailers that expanded into different countries with M&S's international expansion strategy to analyze whether their expansion strategy and how they communicate wither their international stores is effective in maintain a good standard across all international stores no matter the location.

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Ilan Alon, the author of ‘Marks and Spencer: A case study in international retailing', focuses his study of M&S on their previous history during the 1990's where their philosophy of high quality products that were reasonably priced was under jeopardy. He analyzes the decline in sales growth, share prices decreased, profits lessened and other issues that M&S were suffering from in the 1990's.

Maureen Whitehead's studies are also a highly regarded resource of information for M&S research as she specifically discusses about the company in many of her articles. The main issues she outlined are the strategies used by M&S to penetrate in a new market and other strategies that many other companies use when entering an international market as they have to tactically plan how to overcome worldwide restrictions. Whitehead also examines how brands progress internationally but keeping the same constant high standard in every store to gain a good reputation worldwide. A specific article that is helpful from Whiteheads work is ‘Britain's Leading Retailers: Quality & Value Worldwide' which is part of the journal ‘Management Decisions'.

Peter J.McGoldrick (1998) researches international expansion of worldwide retailers; within McGoldrick's article he compared the position of M&S to competitor C&A, both whom are international companies and have a similar price and variety range for their products. He also scrutinizes franchising, international image and position of a company within the new market. In an article of McGoldrick's and Ho they also criticize M&S strategic plan as a flourishing national retailer who failed to succeed in the international market. This research will help in evaluating whether a poor strategy was the reason for the failed attempt to succeed continuously in the international and national market.

Luc Vandevelde, the chairman and chief executive of M&S, article quoting his speech on M&S strategy was found by searching for “Marks and Spencer strategy” on the Google search engine. Although his speech was from July 2001, it was regarding a ‘management recovery plan' for the company which was previously suffering. Luc Vandevelde speech promised a new strategy that would greatly benefit shareholders value per share in the future. He reassures that M&S would be a good investment for any new potential shareholders as their share value would rapidly increase due to the new strategic planning. The new strategy plan was supposedly reconnecting with their customers and market, strengthen communication with their suppliers and other aspects that would integrate them with the market fully. This is useful for the research as we can examine if they have adopted the new strategy and whether it has truly benefit M&S.

A key source for the research into M&S strategy and success is the actual company website. This provides a key insight into the financial documents and reports published to all stakeholders of success and failure of the company in the market. The also have a section in the website made for students research the company so they provide reports, plans presentations and general needed information about the company that can aid a researcher in successfully analyzing M&S situation and market position. These aspects will help in successfully analyzing how successful their strategy is in improving there current market situation.


Marks and Spencer have over 400 stores just in the United Kingdom; their largest store is located in Marble Arch, London. The company also has over 700 stores worldwide. Marks and Spencer are also found in over 30 countries.

It was 1884 and Michael Marks decided that he should open up a stall in Kirkgate market, Leeds. Eleven years later he moved to Cheetham Hill Road and then a year later he opened up a shop in the bottom part of the building he lived in. By 1894 Michael Marks and Tom Spencer decided they wanted to form a partnership. In 1901 Michael and Tom opened up a head office and a warehouse built to their specification, it was located in Derby Street, Manchester. In 1904 Marks and Spencer opened up another store. Unfortunately on the 25th July 1905 Tom Spencer died and a few years later on the 31st December 1907 Michael Marks also died.

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Marks and Spencer was still running though both founders were dead and in 1916 Michael Marks' son, Simon Marks, became the chairman for Marks and Spencer. Ten years later Marks and Spencer Limited became a public company. By 1930 many Marks and Spencer stores opened up Café Bars. 1956, all Marks and Spencer good were sold under the St Michael label.

1964, after 56 years of service to Marks and Spencer Simon Marks, the chairman, died. In 1975 Marks and Spencer was opened in Boulevard Haussmann in Paris and Brussels in Belgium. Also in 1979 the first Marks and Spencer was opened in the Republic of Ireland. Marks and Spencer first website was opened in 1999. In 2000 Marks and Spencer launched ‘Count on us' food products.

The main objective of the strategy of M&S is expansion into the worldwide market and to constantly keep ahead of the fashion market so that they can constantly inspire customers and raise the quality and standards or their product range. For the company to continue it previous success they kept adapting new strategies when former strategies started to fail. M&S plan to focus on keeping strong connection with their current customer whom have been loyal for many years and are the reason for the rapid growth and success of the company. Another main focus is to work closely with the market to build a strong bond and trust with their shareholders and provide best possible dividend whilst maintain company standards and profits. Strongly considering their stakeholders opinions is important because any companies' success depends on its market, so even keeping a strong connection with employees on company improvements, and keeping peace between pressure groups and the company is useful in improving the brand image

The main issues that M&S faced over the past few years is when their sales dropped massively compared to previous success. M&S currently publish what their business plans are and what they hope to aim for within the upcoming few years. What will be done in this research is the investigation of whether M&S has successfully abided to the strategy but still failed, meaning the strategy was poorly planned, or whether in fact the strategy has increased their growth within the UK and worldwide market.

A main way into researching how successful a business is, is by questioning the customers and shareholders as they are the source who determine the success or failure or a company by how loyal they are to the brand and how they invest into the company. I have created two questionnaires which I will firstly trial on a small representative sample. To hand out the questionnaire in once specific area may prove bias as it is not representative of the whole UK population that is stakeholders of M&S. Therefore I may chose to make this a web questionnaire as it means M&S from different locations of the UK or possible worldwide can contribute on the analysis of whether the company's strategy has worked in improving its success.

After doing a small sample I will be able to re-write the questionnaire to make it more in-depth or change the questions if the information I received is not useful in analyzing M&S's current position. However my initial draft I believe can help in receiving an insight into stakeholders' opinions and their future investment and relation to M&S.

Below I have commented on what uses the question will provide in helping create an overview of M&S popularity and success:


1) Sex of shareholders will show which gender is more likely to invest and see success of investment in M&S.

2) Identifies which age group the shares are more likely to be purchased by and could show possible trends in reasons of the age groups interest.

3) Highlights the reasons for M&S attracting investment.

4) Shows if they are current happy with M&S's performance.

5) If shareholders are planning to invest more M&S strategy must be working as their current shareholder are receiving good dividends and have built up confidence in M&S.

6) If a high number of shareholders are planning to sell their share it shows that they have lost confidence of M&S future plan of success.

7) If M&S are keep close contact with shareholders and they are well informed it would mean that they have a good overall understanding of the company's situation and may cause them to invest more if they are confident of future success.

8) The question gives the shareholder an opportunity to make addition comments concerning their thoughts on their shares and M&S market situation.


1) Sex of customer shows the gender that purchase more of M&S products.

2) Age shows which age groups M&S attract more.

3) This shows what aspects of M&S they are more successful in as it is the reason for the customers' visits.

4) The number of visits will show popularity and loyalty of customers, if there is a high amount it shows that M&S is possible working as customers seem keen to return to the M&S stores.

5) The average amount spent per visit can show how predict sales in the future can be.

6) This could highlight if marketing is not a source of attracting customers. It if is not a reason for them being attracted M&S could possibly invest more in marketing to aid in attracting more customers.

7) A good service will keep customers happy in returning to the store as they know that they will be helped and served in a friendly manner. However poor customer service can result in loss of customers and damage to the brand name.

8) This question is a general comment for the customer to express any opinions they have on M&S.

Both questionnaires can be found in the appendices.

Appendix 1

Questionnaire 1

Questionnaire to be answered by current M&S shareholders

1. Sex?

¨ Female

¨ Male

2. Age group?

¨ 18-25

¨ 26-35

¨ 36-45

¨ 46+

3. What initially attracted you to invest by purchasing shares of M&S?

¨ Low share price

¨ Rapid growth and popularity of M&S

¨ Forecast of future dividends/share value

¨ Other



4. Do you feel this was a good investment? Please state why

¨ Yes

¨ No

5. Do you intend to invest more currently? Please state why

¨ Yes

¨ No



6. Are you planning to sell you shares within the current year? Please state why

¨ Yes

¨ No



7. Do M&S answer you queries helpful, do they keep you well informed about your shares?

¨ Yes

¨ No

8. If you have any addition comments on M&S shares please state them below

Appendix 2

Questionnaire 2

Questionnaire to be answered by M&S customers

1. Sex?

¨ Female

¨ Male

2. Age group?

¨ 18-25

¨ 26-35

¨ 36-45

¨ 46+

3. What attracts you to shopping at M&S?

¨ Quality clothes at reasonable prices

¨ Marketing

¨ Food and Home ware

¨ Gifts

¨ Fashionable/ trendy

¨ Brand image

¨ Other



4. As an estimate how often do you visit M&S?

¨ More than once a week

¨ 1 time per week

¨ Once every fortnight

¨ Once a month

¨ Once every couple of months

5. How much do you roughly spend per visit?

¨ Less than £20

¨ £20-£40

¨ £50 +

6. Does M&S marketing influence your desire to buy from their stores? Please state why

¨ Yes

¨ No



7. Does M&S offer good customer service?

¨ Yes

¨ No

8. What suggestions would you make to improve you shopping experience at M&S stores?


Int. Rev. of Retail, Distribution and Consumer Research 12:2, page 191-219. S.L.Burt, K.Mellahi, T.P.Jackson and L.Sparks; Retail internationalization and retail failure: issues from the case of Marks and Spencer (April 2002)

Peter F.Drucker (1974); Managing for Results

Brenda Sternquist and Madhav Kacker (1994); European Retailing's Vanishing Borders

Ilan Alon (2000) MARKS & SPENCER: A CASE STUDY IN INTERNATIONAL RETAILING; http://www.elearning.ulg.ac.be/old_demos/HEC/html/marks.pdf

Maureen Whitehead (1994); Management Decision, volume 32 issue 3 page 38-41; Marks & Spencer: “Britain's Leading Retailer: Quality and Value Worldwide”

Peter J.McGoldrick (1998); Spatial and Temporal Shifts in the Development of International Retail Images

Web pages

Maggie Urry;


Marks and Spencer;


Times Online M&S forecasts;


Luc Vandevelde Chairman and Chief Executive of M&S, Strategy speech;