What are the Strategic Issues Facing Marks & Spencer and what strategy should they follow next - Essay Example

The two merged to form a chain of small penny stalls under the retail name of Marks and Spencer plc. Michael Marks was succeeded by his son Simon Marks in the running of the stalls. Simon Marks, soon turned around of the bazaars into fully fledged stalls and introduced the St. Michael’ Logo which was used as a distinct sign of quality on all the Marks and Spencer products. With over 885 stores in 40 territories,600 in the UK and survey data showing that one in every three British women were wearing on of the Marks & Spencer range of bras, Marks and Spencer was officially recognized as being the largest clothing retailer in the UK.

In 2010, a new CEO was appointed to head the company and the CEO was immediately besieged with a myriad of issues associated with continuing the challenges of strategic change and reassessing the company’s competitive strategy. Challenges Facing Marks & Spencer. Some of the internal issues facing Marks and Spencer include insufficient levels of communication between the Board and the investors. Examples of this situation include the announcement by Stuart Rose in April 2008 declaring his taking over the joint role as both the company CEO and also as the chair of the board of directors.

This move proved to be quite unpopular, since it was in breach of the advice that the company got from the combined code of corporate governance. The body provides a, code that is voluntarily followed by most of the FTSE 100 companies. The moved proved to be immediately unpopular with investors, who deemed that Rose was now holding too much power. This is especially since the move by a single person, to hold the combined roles, had previously proved to be dangerous. There were also fears that it could prove to be detrimental once again.

Rose overlooked all these concerns and proceeded with the appointment (Hill & Jones 2010). In the first half of the year 2009, Rose and his marketing director awarded themselves an enormous ?1 million package in the form of bonuses and shares. The move was opposed by investors and, Rose and his Marketing Director were forced to give up the package in order to try and appease the discontented shareholders. Louise Patten also came under fire, and there was a motion to block her reappointment for signing off the bonuses.

In the July 2009 AGM, Rose narrowly survived a motion of no confidence by investors who were concerned about his joint role as both the company CEO and Chairing the board of directors. Over 40 percent of the investors had voted against the reappointment of Rose as Chair. Rose was in the limelight once again when in May 2010, the investors expressed their frustration with the board after, when without any shareholder consultations whatsoever, the board negotiated an impressive golden hello deal for the new CEO Bolland, amounting to ? 7.5 million in the form of cash as well as shares.

The deal was criticized by many critics as being excessive and credited with giving Bolland a less than perfect start to his tenure at Marks and Spencer plc. (Collis) Among the corporate issues facing the company include the announcement by Rose in July 2009, stating his intention to stand down as the company CEO, but not as the Chair of the board until 2011. This move was seen by investors as having the probability of creating an almost impossible leadership task for Mark Bolland, the incoming CEO with Rose and the Marks and Spencer plc board looking set to remain in their capacities for the medium term.

The inability by Marks and Spencer to break into the mid-age demographic, and its over reliance on the 55years+ demographic which comprised of nearly two thirds of its customers was also criticized by Tony Shiret in 2009. The launch of the (GIVe) range of