Jackson and Sparks (2002)

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M&S

By 1998 the store had retail sales of $8b and 15% of the UK clothes market in the mid-1990s. Its success lay in its unorthodox way of doing business, always doing things differently. It did a number of bizarre things:

• It persisted in manufacturing in the UK when others were producing abroad
• It did not market its brand at all. It hoped that people would buy its products on the basis of trust alone.
• It did not accept credit cards until quite late in the game – from 1984 it had its own store card, which was the third biggest card after VISA and Mastercard

It was a supremely self-confident company. Historically, M&S was a paternalistic firm, which promoted from within and was famous for treating its staff very well indeed.

Drucker (1974) described M&S as a “social revolution”, where Simon Marks ensured that the employees had “clothes fit for a lord” and “food fit for a king”.

1984 - Expansion. Lord Raynor was the first outsider CEO to the company in 70 years. He began an expansionist strategy, though this was unsuccessful in Canada.

1991 - Cost containment. Sir Richard Greenbury took over at a time of retailing problems in the UK. Cost containment became an issue and the customer was increasingly ignored. Although Greenbury was famously rude and authoritative, profits rose from £615m in 1991 to £1.15b in 1998.

1998 - 2000 - Disaster. sales dropped sharply to £0.14b despite increases in international and financial sales. The UK clothing market share dropped from 13.9% to 10.9%. This scale of failure was “emblematic” of a crisis.

Causes of failure - External

Causes of failure - Internal

Internal - Too rigid

Conclusion