Mark and Spencer

QUESTION ONE

Analyze and critically evaluate the underlying problems at M&S in the early 2000s.

Mark and Spencer is a world garment industry that faced several challenges in the early 2000s. As a result, the organization began experiencing a decline in profits and a lack of customer satisfaction. Three factors in the business environment led to these problems. They include:

Lack of using management technologies

Focusing on product orientation instead of customer orientation.

Lack of innovation, particularly in marketing the products.

Management is significant in a business as it entails coordinating activities to be conducted in a company. Thus, enterprises employ managers to take charge of the organization and help the business reach its operational and financial objectives. However, M & S used the traditional management model in the early 2000s. Currently, organizations are incorporating the use of technologies in management. These technologies are significant as they influence the management and communication in the business environment.

The first benefit of using management technology is that it enables an organization to manage resources effectively (Ahmed, 2020). The decline of profits in M& S might have resulted from the improper use of the organization's resources. If M & M&S had budgeting software, it would have appropriately allocated the resources and tracked spending and expenses. The second benefit is that management technology enhances communication within an organization. Technology enables organizations to have open communication channels; hence M&S could have easily communicated with all the stakeholders. As a result, the problem would have been easily solved when there was fast and open communication.

M&S was also more focused on customer orientation compared to customer orientation.

Product orientation refers to 'the orientation of the company's sole focus on products alone." It is similar to using a differentiation strategy. Thus, the organization puts effort into producing quality products and fixing them at the right place so that customers can differentiate them from those of the competitors. However, the business environment is becoming increasingly competitive, and the customers' needs change regularly. That is why the analysts at M&S were complaining that their competitors were using a low-cost strategy, which is why it declined customer satisfaction. A low-cost system entails lowering the cost of the products compared to competitors' to gain a competitive advantage. However, the problem at M&S is through customer orientation. The reason is that the strategy enables businesses to thrive as they consistently improve customer focus. It entails aligning the business's goals to the customers' goals. When the customers are satisfied with the products offered by a company, it increases their loyalty. Thus, M&S could not have complained about the strategies used by the competitors as they could have loyal customers.

M&S was also not innovative in marketing its products in the early 2000s. Being a garment organization, marketing could have played a significant role in educating people about their products and services. However, M&S could have been strategic in marketing their products. For instance, being a garment company, marketing segmentation is significant. Segmentation entails dividing the target markets into subsets based on their demography, priorities, needs, and everyday interests (Martin, 2011). It will help M&S in innovating strategic marketing ideas for their products. For example, when advertising kids' collections, they will determine the current fashion that kids adore and promote using kids' themes. Segmentation also helps to deliver better customer service. Thus it will also increase customer satisfaction.

Therefore, M&S experienced three significant problems in the early 2000s. These problems resulted from a lack of management technologies, focusing on product orientation, and lack of innovation, particularly in marketing. All these factors have been critically analyzed and discussed. The measures for solving the challenges have also been included in the discussion.

QUESTION TWO

Compare and critically evaluate the turnaround styles of Holmes and Rose. What type of changes were they trying to employ in nature and scope?

Both Holmes and Rose were elected as CEOs at Mark and Spencer Company. However, there is a variation in their leadership styles based on decision making, pricing strategy, and store opening and closing strategy.

Decision-making is a core aspect of any organization as it involves making choices that influence the performance of an organization (McKenzie et al., 2011). Holmes was slow at decision-making because he applied the board members. As a result, he first had to organize a board meeting and discuss the matter before making the final decision. Decision-making by a committee is good as it gives more information; hence the best decision can be made. However, the current business environment requires the business leader to have the ability to make independent decisions. The reason is that the business environment is dynamic; hence changes occur constantly. Therefore, agility is necessary. Rose made decisions without debate from the organization's board, and despite it resulting in communication breakdown, particularly with the employees, there were significant improvements in the organization.

Another difference between Holmes and Rose is that Holmes focused more on store opening strategy while Rose used the store-closing strategy to earn profits. There was a decline in profit at M&S; Holmes opened more stores to satisfy the customers' demands. However, he was not strategic at implementing the strategy. Opening more stores lead to expansion as it exposes the products to a broader audience. M&S was already facing a financial crisis, and spending more money on expansion was not a prudent decision. The reason is that the strategy is costly and time-consuming as it takes a longer time before the store starts making profits.

Conversely, Rose used the store closing strategy. He began by closing down underperforming stores. The strategy helps increase profits for an organization because it makes it gain value and increases the brand image.

Another difference in the turnover styles of Holmes and Rose is in the pricing strategy. Holmes knew that there was a decline in customer satisfaction and sales. For instance, the women's clothes were not being sold as per their expectations. Holmes, therefore, issued high discounts to the customers to make them purchase the products. Despite the increase in sales, there was a continuous decline in profits as the organization counted losses.

On the other hand, Rose was strategic at pricing the products. That is why he developed the 'good,' 'better,' 'best' pricing strategy to ensure that the products' price was based on the quality. The strategy enabled the organization to achieve customer satisfaction and also increase revenue.

Another difference is that Holmes was overpromising and under-delivering while Rose was under-promising and over-delivering. When a leader only promises and fails to deliver the promises, people lose trust in the leader and begin questioning leadership skills. For instance, M&S was continuously underperforming even in times of festivities when sales were high, yet Holmes was only giving excuses for the underperformance. On the other hand, Rose promises little regarding his changes. He outlined his objectives and worked towards achieving the goals. As a result, people trusted his leadership skills because the performance was enough proof. Hence, the board members trusted him with the decision-making and progress of the organization.

Therefore, both Holmes and Rose were trying to revive the performance of the M&S Company. They both aimed at increasing sales and boosting profits. However, their turnaround styles differed. For instance, Holmes was slow at decision-making because he involved the board in the process while Rose made quick decisions.

QUESTION THREE.

Why do you think Rose found success for M&S when the preceding CEOs had not?

Rose was a success at achieving a turnover for M&S when the preceding CEOs failed. His achievements are attributed to his experience in business, leadership and strategic management, pro-activeness, and innovation.

Firstly, Rose was successful because of his experience. When Rose was appointed as the CEO of M&S, he was 55 years old. He has worked in M&S as a trainee before being promoted to a senior executive position, where he served for 17 years. Having worked in the organization before and the experience earned in other organizations, Rose was why he succeeded. The position of M&S in the competitive business environment required an experienced CEO. An experienced CEO can drive faster change because they can approach challenges from various dynamics. Experienced CEOs are also able to drive for the return of shareholders. After Rose was appointed CEO, Green returned, and they wanted to invest their share in the organization.

Secondly, Rose was successful because of his leadership style. Rose discovered that in M&S, there was minimal communication with the employees as they were subjected to work without debate. Employees are significant in any organization as they determine the output of the products. Communication with employees, therefore, helps in eliminating problems and enhancing performance. The employees can also work as a team when there is effective communication, and they can also give ideas for boosting the business. Hence, Rose involved communication among employees.

Thirdly, Rose was successful because of strategic management. It focuses on "the procedure for setting goals, business processes, and objectives to make a company more competitive." (Tapera, 2014). In the management style of Rose, he was precise on what he wanted to achieve. Therefore, he first outlined his short-term objectives. Objectives are significant as they give a business a sense of direction. Strategic management also increases operational efficiency. The reason is that strategic management enables an organization to channel and monitor operation. Because Rose knew the significance of efficient processes, he came with his colleague Steven to oversee operations at M & M&S. Thus; there were minimal organizational changes. Strategic management also increases market share and profitability. Rose was able to develop strategies that increased market share, such as closing down stores that were not profitable. The profits margin also increased significantly as a result of being strategic.