Marks and Spencer (hereinafter called M&S) is one of UK's leading retailers of clothes, food, home products and financial services (Kippenberger, 1997, 32-36). M&S has a record of success and profitability since its establishment with well known reputation for its innovative, quality products and reasonable price which offers customers value for their money. M&S sales and services been declined in mid to late 1990s. The purpose of this report to identify the key drivers that made M&S falls in their performance (Stockport, 2000, 45-52).
The external environment scanning is concerned with the forces and factors that impact upon M&S. However, analysing those forces and factors will assist M&S in identifying the change in the environment, is often referred to as the macro-environment, planning in how to cope with such a change, and being ahead of the competitors in the adaptation to the new environment and the response to the market demands. PESTEL framework and Porters Five Forces model are the techniques that author uses to identify and analyse the problems that M&S experienced in the mid to late 90's. Then the author carries out an internal analysis of the organisation's resources and competences. Resource audit, value chain and SWOT analysis are the techniques to examine the activity of the M&S in order to reveal what was the basis of their competitive advantage. Furthermore, the author uses the cultural web analysis in order to identify what were the main cultural features of M&S until the mid 90's. And discusses were the resistance to cultural change originated and what aspects need to be changed. Finally the author identifies and evaluates the strategic choices available to M&S by using BCG matrix, Strategy Clock and Ansoff model techniques. A brief conclusion and recommendations for the strategy of M&S for the next 3 years will follow (Grant, 2002, 69-178).
Fahey and Narayanan (1986) argue "that macro-environmental conditions set the fundamental context in which industries operate" (Fahey and Narayanan, 1986). The Political, Economic, Social, Technological, Environmental, Legal (PESTEL) framework shall be used in order to identify the changes in the external environment that caused decline in the M&S performance in the mid to late 1990's (Bevan, 2001, 58-148).
European Committee decision to permit free flow of trade among themselves and other countries under foreign trade regulations makes companies to import their products over time easier than before. M&S competitors took advantage of its higher cost structure and bit off some its market share.
M&S competitors are specialised in niche markets and consumers' focus which make them to provide a much better consumers satisfaction. They prefer to import their products from abroad for cost savings, this fact puts M&S in a cost disadvantage for a perceived "higher quality" (Keynes, 2002).
Consumers' concept in the marketplace has changed; they do not sense British products as of high quality. There is a shift in demand for more fashionable clothing. Moreover the price sensitivity of the majority of ...