Marks and Spencers Strategic Management - Case Study Example

Marks and Spencer's Analysis for Cultural Theory Question The success story of Marks and Spencer's is one that has adorned most newspapers and articles on business issues until late in the 1990s. The problems for this chain began when it put a stop to its European side of the expansion in 1998. This gave rise to a plethora of problems beginning from a divergence from the real customer's needs, to lack of initiative to face competition in the market. Store acquisitions, refurbishing and new collections came with new CEOs, yet the competition was tough in the face of brands like Oasis. Problem Areas Lack of initiative in above the line advertising, like other high street brands. Difficulty in managing HR Lack of expansion initiative Lack of expertise to face competition Theoretical Base for Problem Solving The basic lack of initiative came from the employee base. It has been felt that with its varied departments and interests, the best way to tackle competition and take forward expansion is to understand varied kinds of people. For this, using a cultural web on the floor is important. Michael E Porter has paved the way for revolutionary strategising trends and a whole new perspective on competition through his competitive advantage theory. In the corporate world, Porter's first book Competitive Strategy (1980), which he wrote in his thirties, became an international best seller, and is considered to be an authoritative piece of work on corporate strategy. The book, which has been published in nineteen languages and re-printed approaching sixty times, changed the way business leaders' minds worked. Further, it remains a guide of choice for strategic managers on a global scale. Apart from being rich in lessons about why and how industries, regions, and nations succeed or fail, this book is of great value as the first serious attempt to develop a really original grand theory of national economic development processes since the early years of Postwar development economics, and one of the most original ways of thinking about development policy in years. Q.2: (a) and (b) Competitive Advantage and Sustainable Entrepreneurial Growth: Under the leadership of Rose, the company had seen growth in Food, clothing and other departs by April 2006. Before laying down the formal plan of action, it is necessary to understand the elements that will be involved in the strategy that has been by Rose, from the perspective of the company. This will help us understand the exact application of the theories through the length and breadth of the paper. A major part of Rose's plan of action must include following a strategy based on gaining competitive advantage as well as achieving sustainable entrepreneurial growth. Let us first examine competitive advantage to see how and where it will fit in with the overall growth and expansion of M & S. External Perspective Competitive advantage is the response of afirm to the pressing need to organize and perform discrete activities. While these needs may not be perpetually spelt out, it is the responsibility of the planners and executers of policies to foresee such situations when catering for growth and development of the firm on various levels. The basic explanation for this comes from the fact that any change on an individual level is effected by changes on a national level. Yet, Porter's theory cannot accommodate strategies and competitiveness at such levels due to various constraints. The first of these emerges from the fact that people run businesses and economies - and everyone has his or her own unique style. These cannot be covered at length when talking which factors and resources will be utilized in which combination. Thus Porter's theory does not provide an accurate account of the diversity and dynamism in the corporate and commercial environment that businesses and firms thrive in. Secondly, there are various activities to take into consideration in the case of M&S. The activities performed when competing in a particular industry can be grouped into categories, as these activities can be divided broadly into primary activities and support activities. It has been noted that primary activities are those involved in the ongoing production, marketing, delivery, and servicing of the product. Whereas support activities are those that provide purchased inputs, technology, human resources or the overall infrastructure functions supporting the other activities. Every activity employs purchased inputs, human resources, some combination of technologies, and draws on firm infrastructure such as general management and finance. Activities vary in their importance in regard of competitive advantages from industry to industry. (Porter M E, 1998). While this is a good theory to reckon with, cynics are of the opinion that in today's world there are 'n' number of influences on a firm's activities and not just a set number of the same. In a nutshell, the company was required to break even and garners profits if the buyer value manages to exceed the collective cost of performing the required activities. Thus, in order to gain competitive advantage over its rivals, M&S must either provide comparable buyer value, and perform activities more efficiently than its competitors at a lower cost, or perform activities in a unique way that creates greater buyer value and commands a premium price through differentiation. If we are to take recent facts into consideration regarding the state of the economy, we will find that this is not necessarily an accurate measure at the national level. Thus, for a more competitive strategy, the theory that the firm adopted was more forward looking. In this regard, M&S made use of clusters which are groups of firms and other broad industries linked to each other on the basis of various skill and their subsets. These function in the sphere of providing the necessary technical and research based support for various customer services, by making use of various institutions and universities apart from interns and other individuals. A cluster that has been well formed and makes the required effort to be called well functioning is one that contributes to the advancement of an economy in terms of growth and development. This is a crucial aspect that most firms tend to ignore. In this way, one can measure the implications of the theory and growth thereof, in a more accurate and reasonable manner. This also helps avoid monopolistic tendencies within markets in order to make sure development is not impeded. This brings us to the issue of equality, which is a major requirement for the development of an organization. The more consistent and widespread the development, the more advanced its overall economy can be called. Unless there is mass involvement in various policies and acts, an industry or a sector of the economy, cannot be called developed by itself. Therefore, there is a need to redefine the theory in order to make sure it accommodates such yardsticks for the measurement of competitive advantage in the case of M&S. This is due to the fact that more people need to be aware of such measures for development to be actually felt and enjoyed. In this case, this will be applied in the form of the marketing strategy laid down later in the paper. Internal Perspective In the context of M&S, does Porter's theory ask the relevant questions What did the company do to ensure that the industry evolves in a way that is maximally advantageous for the organization in particular What skills and capabilities did the company begin building now if it is to occupy the industry high ground in the future How did the company organize for opportunities that may not fit neatly within the boundaries of current business units and divisions The answers are to be found in not in this theory but in the theories propounded by Gary Hamel, C.K. Prahalad titled Competing for the Future. The authors are of the firm belief that when armed with the information in their findings and subsequent theories, a company can create a pro-active agenda for organizational transformation and can control its own destiny by controlling the destiny of its own industry. Few companies that began the 1980s as industry leaders ended the decade with their leadership in tact and undiminished. Many household name companies saw their success eroded or destroyed by tides of technological, demographic and regulatory change and order-of-magnitude productivity gains made by nontraditional competitors. "Do you really have a global strategy", the first article by Hamel and Prahalad, developed the theme that small companies could prevail against larger, richer companies by inventing new ways of doing more with less. Differences in resource effectiveness could not be explained by efficiency, labor or capital, but by amazingly ambitious goals that stretched beyond typical strategic plans, raising the question how such incredible goals could get past the credibility test and be made tangible and real to employees As if in answer to this question, managers of late, have created new competitive space while sick units have protected the past rather than creating the future. In this regard, Porter's existing theory throws little light on what it takes to fundamentally reshape an industry and the gap provoked this book in which the goal is to enlarge the concept of the industry and not just the organization. Being incrementally better is not enough because a company that cannot imagine the future won't be around to enjoy it. (Hamel et al, 1996) New competitive realities have broken down various industry boundaries as far as the lifestyle segment in developing countries is concerned. Also, a large chunk of the standard management practice has been discarded, while the conventional models of strategy and growth have been declared obsolete. These have been replaced by the powerful ideas and methodologies of Gary Hamel and C.K. Prahalad, whose much-revered thinking has already given birth to a new language of strategy. While it is true that their work paves the way for the development of a coherent model for how today's executives can identify and accomplish no less than heroic goals in tomorrow's marketplace, one can also determine ways for executives to ease the tension between competing today and clearing a path toward leadership in the future on a more global level through the basic framework of the theory laid down by the authors. This will hold testament to the importance and relevance of competitive advantage that forms the backbone of so much of today's accepted wisdom. Each argument put forward by the authors is clear and is seen to be progressing through the reasons behind competitive strategy being believed to be less mechanical that the claims of Porter in his theory of competitive advantage. Therefore, Porter's approach lacks the underlying belief that winning in business today is not about being number one - it's about who "gets to the future first", thus making the "core competencies" approach the right one to strategic planning when it comes to providing a full account of either a nation's competitive advantage and corporate strategies or the growth and development of industrial clusters. The decentralization of accountability, authority and responsibility help in making better use of the human capital at M&S. It gives the workers the scope to bond with each other and know more about each other's strengths and weaknesses. 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