Headlines.
BBC news reported that by the middle of next week 30th May 2018, Marks and Spencer will discover whether it will remain in the FTSE 100 or whether it has lost its place as a British blue-chip stock. The retailer has been a member of the FTSE 100 since the index was formed 34 years ago. But next week, FTSE Russell will conduct its quarterly reshuffle of the index which could see M&S relegated to the FTSE 250 and online grocer Ocado rising into the leading ranks.
Looking at the retailer from a transformation perspective we begin to analyse the reasons for the decline.
Strategic Alignment
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Current state |
Macro Market movements |
| 130 year history started in 1884 in Leeds
2018 still number 1 in mens and womens wear. Ideal customers are aged 8-80 Nations favourite high street store Simon marks transformed the business in the early 1900s Food + wine account for 60% of business Fashion accounts for 40% Quality clothing at affordable prices to middle classes (key USP) Brand advertising a la food adverts (key strategy) Staff happiness (key strategy) |
Reduce property portfolio by 2022 to 100 stores
Glory days are long gone. Profits falling High street shopping habits are changing in the face of online retailing Sticking with British manufacturers part of the problem (expensive supply chain) Competitors are stepping up their levels of innovation a la Primark with more expansive supply chain M&S boss says firm too ‘inward looking’
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Business Capabilities
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Current state |
To Develop |
| End of 20th century M&S made £1bn turnover, the next year this figure halved
21st century making £0.5bn per annum Had great success with quick turnaround of new fashion in the 1980s Tried to counteract competitors by introducing instore fashion arms George and Per Una which contributed to losing its distinctiveness Took their eye off competitors, felt too big too fail, discounted upstarts like Primark and Topshop, finding it hard to change the course of the juggernaut (more online) USP – Customer service, Amazing staff loyalty |
Competitors use overseas suppliers to lower supply chain and operating costs
M&S has lost ground by not following this trend and staying British Web based manufacturers – Fast fashion online retailers are producing new lines at record speeds and getting them to market quicker
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Systems Architecture
| Current state | To Realign |
| Computerised analysis of products, sales
Impact on the high street (more shopping online) Impact of the intelligent shopper
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New approaches of the online retailers
24 hour turnaround of new fashions or products Lower operating costs
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Solutions Implementation
| Current state | Benefits to realise |
| Forming new collaborations with social media stars for advertising and marketing
Recent advertising campaigns have been too broad (ages 30-80) Reduce physical high street presence
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Should concentrate on core customer – 50+ maybe?
M&S need a radical change to maintain their position in the market |
Mr T Says,
Reduce costs by reducing the number of high street shops.
Improve operating effectiveness and costs by rationalising the supply chain.
Improve customer satisfaction by getting products to market faster using online manufacturers based anywhere in the world.
Remember Selfridges and their fabulous windows. Market movements “DRIVE” businesses to transform at some point in their lives.