COB S2

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Introduction (130 words) Marks and Spencer Group plc (M&S) is a retailer in the United Kingdom, with over 1,380 stores around the world. The Company is the holding company of the Marks & Spencer Group of companies. The Company operates through two segments: UK and International. The UK segment consists of the United Kingdom retail business and the United Kingdom franchise operations. The International segment consists of Marks & Spencer owned businesses in the Republic of Ireland, Europe and Asia, together with international franchise operations. The Company is engaged in delivering own brand food, clothing and home products in its stores and online both in the United Kingdom and internationally. The Company sells womenswear, lingerie, menswear, kidswear, beauty and home products, serving customers through approximately 300 full-line stores and Website, M&S.com. It has approximately 910 United Kingdom stores, including over 220 owned and approximately 350 franchise Simply Food stores. 1. Discuss the impact of external environmental factors on your chosen using PESTEL analysis for chosen business. (500 words) There are also several other factors in the external environment of M&S. This PESTEL Analysis explains these factors and how they impact the business of M&S. POLITICAL Marks & Spencer has a brand presence which is widespread in various countries. The brand operates 1300+ stores all over the world and has its headquarters in UK. The company has had the benefits of EC’s trade agreements and that further leads to decrease in the sourcing costs. Marks & Spencer can utilize the benefits of the large EU market where its products can travel freely across various countries without restrictions such as tariffs and taxes. Pricing regulations of other countries such as are there any pricing regulatory mechanism for Consumer Services. Marks & Spencer believes that is very important to work closely with the government and interact with them to protect an organization’s legitimate interests. They respond to government queries which is publicly available on their site. The company also bags full support from the government as it has rich historic values and fair means of trade practices. The two main factors affecting the company are political stability and taxes. If government increases taxes then that further increases the price of the products of Marks & Spencer which would have negative implication on the sale of its products. ECONOMIC Economic factors include inflation rates, interest rates, foreign exchange rates and economic growth patterns etc. The United Kingdom is one of the largest economies in the world and also is an open economy. Fiscal and monetary policies of UK are properly managed as the government has strong finances and has successfully maintained a low rate of inflation. The company overall has a strategy which is aligned with providing quality products to its customers. Financial crisis, can however lead to decrease in the demand for high quality products for Marks & Spencer because of low disposable

income in the hands of the consumers which further reduces their ability to spend on luxury or clothing. Marks & Spencer have been affected by the crisis as the company had to make job cuts of 2% of their staff of 70,000 employees. The recession affected the company’s ability to give discounts as the company scrapped off the initial idea of offering a discount of 20% on Christmas. SOCIAL Marks and Spencer is no new name in the United Kingdom. Having been around since the 1800s, the retail chain is now a household name among the youth, the elderly, and everyone in between. However, this long-standing reputation has had an unfortunate consequence: consumers are beginning to associate Marks and Spencer with the past. As new and trendy retail chains pop up every year, Marks and Spencer’s reputation may become a less trendy brand for consumers — especially younger consumers. Within the last ten years, society has seen a wide-scale increase in the consumption of ready meals. This may be because ready meals are more palatable than ever thanks to advances in food technology. In any case, this huge new industry is a massive opportunity for any food store. Marks and Spencer has long sought to dominate this industry; while it’s unclear just how large a market share the name captures, it’s reportedly one of the UK’s top ten ready meal distributors. TECHNOLOGY One of the biggest trends in modern-day retail, especially in food stores, is self-checkout. This industry- wide trend is designed to help retailers save money that might otherwise be spent on cashiers, while simultaneously offering customers a checkout experience that is usually faster. Like most other UK food stores, Marks and Spencer has already implemented a number of self-service checkout systems across its stores. Another big trend in retail is that of online shopping. As you’d expect, Marks and Spencer has already established a strong eCommerce presence, offering almost all of their goods from clothing to foodstuffs to home products. M&S takes the traditional approach to online shopping with their clothing items, delivering goods directly to buyers. However, it appears that Marks and Spencer does not deliver food items, unlike some other major food stores in the UK. LEGAL The legislations in every country are ever-changing. Marks & Spencer continuously conduct training sessions on areas such as health and update them every single year in order to keep themselves updated with the current laws and legislations. The brand came under public scrutiny when it was accused of failing to protect its employees as well as the workers from potential risk of exposure to asbestos. The Marks & Spencer store in Broad Street was getting being renovated at the time when ceiling tiles containing the cancer-causing material fell down to the floor. The company however, failed to address the entire issue and turned a blind eye towards the entire issue. They were eventually convicted of two charges one of whom was based on the Health And Safety at Work Act 1974 in order to take measures for establishing norms towards the safety of the workers. They convicted for both the offences and fined 500,000 pounds for each offence. ENVIRONMENTAL

Wanting to maintain their image as a luxury brand, Marks and Spencer has pledged to become a more sustainable retailer on numerous occasions. This relates to a multitude of Environmental factors that are present in the acquisition of food, clothing, and home products (such as carbon emissions from manufacturing processes and deforestation for farming land). Marks and Spencer’s move to become a more sustainable retailer is nothing too unique, however, as many other UK retailers have pledged to do the same. 2. Recommend a suitable leadership style from leadership styles (750 words) Leadership is defined as a process or an activity, where an individual takes up the role of influencing, persuading and guiding an individual or group of individuals for attaining specific targets within a stipulated period. Therefore, the role of a leader is to ensure that the energies and skills of employees are directed towards the achievement of a common goal. 1. Coaching leadership style A coaching leader is someone who can quickly recognize their team members’ strengths, weaknesses and motivations to help each individual improve. This type of leader often assists team members in setting smart goals and then provides regular feedback with challenging projects to promote growth. They’re skilled in setting clear expectations and creating a positive, motivating environment. The coach leadership style is one of the most advantageous for employers as well as the employees they manage. Unfortunately, it’s often also one of the most underused styles—largely because it can be more time-intensive than other types of leadership. 4. Autocratic leadership style Also called the “authoritarian style of leadership,” this type of leader is someone who is focused primarily on results and efficiency. They often make decisions alone or with a small, trusted group and expect employees to do exactly what they’re asked. It can be helpful to think of these types of leaders as military commanders. Autocratic style can be useful in organizations with strict guidelines or compliance-heavy industries. It can also be beneficial when used with employees who need a great deal of supervision—such as those with little to no experience. However, this leadership style can stifle creativity and make employees feel confined. 5. Laissez-faire or hands-off leadership style Laissez-faire style is the opposite of the autocratic leadership type, focusing mostly on delegating many tasks to team members and providing little to no supervision. Because a laissez-faire leader does not spend their time intensely managing employees, they often have more time to dedicate to other projects. Managers may adopt this leadership style when all team members are highly experienced, well-trained and require little oversight. However, it can also cause a dip in productivity if employees are confused about their leader’s expectations, or if some team members need consistent motivation and boundaries to work well.

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6. Democratic or participative leadership style The democratic style (also called the “participative style”) is a combination of the autocratic and laissez- faire types of leaders. A democratic leader is someone who asks for input and considers feedback from their team before making a decision. Because team members feel their voice is heard and their contributions matter, a democratic leadership style is often credited with fostering higher levels of employee engagement and workplace satisfaction. Because this type of leadership drives discussion and participation, it’s an excellent style for organizations focused on creativity and innovation—such as the technology industry. In the early stages of M&S it started off with the concept of family business, the power back then was mostly in hand of the founder family and the leading method was following traditional family values(J Phyl, case study). It was strongly inward looking originally. However in the late 90’s they had to have a change of leadership due to the company’s underperformance issue. Under Vandevelde’s leadership M&S came up with a recovery strategy which brings the company closer to its original operating concept that providing quality value and service to its customer. The strategy saved M&S’s reputation and returned it to its core strength. Vandevelde’s leading methods could be considered close to consultative leadership, because even though it was still the leader making the decision but opinions of the staff in the company was taken in consideration in order to follow the company’s reputation and tradition. In other words, there was a group within the corporation’s framework affecting the final decision. Democratic Leadership Style is recommended for M&S . Under democratic leadership (also known as “participative” leadership), every team member has a valued voice that management genuinely wants to hear from. These workplaces are typically more flexible and collaborative, but that comes with a price: Longer, more frequent meetings to discuss everyone’s opinions and hash out ideas. Democratic leaders inspire and motivate their workforce without micromanaging — they trust trained employees to take authority over decisions in their assigned jobs. It’s a management style that’s designed to give employees more room to be creative, look to the future and find new solutions to old problems. Employees on the leadership track will also be prepared to become transformational leaders themselves through mentorship and training. Democratic leadership impacts individuals' self-growth. Abraham Maslow's hierarchy of needs places self-actualization at the top of the needs pyramid and defines it as a person's full realization of his potential. Democratic leadership helps transform members of a group into individuals who transcend beyond self-actualization and their own self-interests for the sake of the group or organization. Along with this includes individual moral development. Democratic leaders commit themselves to selfless ideals and align their personal principles and values with that of the organization, group or even society. The leader nurtures his followers' moral development to internalize these same values and principles.

3. Critically comment on their Corporate Social Responsibilities in the processes using evidence from your research (750 words) CSR activities are about a blend with the business and not something which can be done independently. CSR reports send a very clear message to its shareholders is send across which is that they intend to look at the long term sustainability of the business. As an example, M&S tell customers about how they went profitable in just two years from in their plan to invest £200 m over 5 years starting from 2007 (M&S, 2009.a). All the CSR activities done by M&S are classified by M&S under Plan A. The reports include the effect, targets, and achievements on climate change, waste produced and managed, sustainability of raw materials, Fair partnerships including fair-trade, and health. M&S has effectively struck a right balance between these by sourcing products like cotton, sugar and coffee from developing countries under fair- trade and sourcing most diary and meat products from the local producers. The report also identifies the key management which is involved in the management of CSR activities include how the commitments are ranked in Plan A and the report, feedback from the key stakeholders and future vision. Carroll’s model consists of four levels: economic, legal, ethical and philanthropic. M&S highly focus on the philanthropic and ethical responsibilities keeping in mind that all the activities it performs are legally done without any allegation on the brand that it carries. M&S have taken a step forward in saving the society by providing energy – efficient appliances, they have dual benefit with this kind of an activity, as they are performing philanthropic responsibilities and are also increasing the sales. Economic responsibility essentially includes shareholders and employees as shareholders are interested in the return on investment and employees will get good job security, paid well only if the company is doing well. Legal responsibilities are mainly for the government and other regulating bodies which look after the legal issues that are undertaken and as a result M&S carries out all its activities legally. Ethical activities are essentially administered at environment and welfare groups. M&S makes an effort to help the suppliers cut cost, increase efficiency, and do things ethically. Community welfare including proper utilization of food products which are donated to the people in need, cash donations, and programs for donation of clothes are also practiced by the company. In Carroll’s model of four philosophies of social responsiveness, M&S falls in the Proactive category which signifies that it is enthusiastic about the actions that it performs and as a result M&S gets by undertaking the CSR activities toward the welfare of the people and the society. This is demonstrated by their commitment to become Carbon neutral and eliminating all landfill waste by 2012. No other retailer has gone to that extent.

what are the effects of Brexit and Covid-19 pandemic in 2020/2021 on your chosen business and how the business addressed the situation. (approx. 750 words) Marks & Spencer has crashed to its first-ever loss after clothing sales collapsed during the first coronavirus lockdown, with more pain to come as English stores face strict new restrictions. The retailer reported an overall pre-tax loss of £87.6m in the six months to September – its first in 94 years as a publicly listed company – ahead of an England-wide lockdown for non-essential retail on Thursday. The M&S chief executive, Steve Rowe, said the majority of the chain’s shops would stay open as its food halls mean it is classified as an essential retailer, although its cafes and its clothing-dominated upper floors would close. M&S’s clothing sales dropped 60% during the original three-month UK wide lockdown but the company was in a much better position as England entered a second one, it said, with less stock in its stores and warehouses. In common with other retailers M&S is pushing for the government to relax Sunday trading laws in December, to enable retailers to safely manage pent up demand ahead of Christmas. It has already extended the opening hours of its food halls, as a lockdown for non-essential retail is introduced in England on Thursday. M&S, which can still sell clothing online and offer click-and-collect in its stores, is better placed than clothing rivals such as Primark to weather the current storm. Primark, which does not have a website, expects to lose £375m in sales during the English lockdown which is due to run until 2 December. The original lockdown necessitated the closure of about half of M&S’s clothing selling space, a situation that reduced sales by more than £600m in the six months to 26 September. The disruption resulted in the clothing arm turning over £917m, compared with £1.55bn this time last year, and making a £107m loss.The retailer’s food halls fared better with sales flat at £2.8bn and the division making an operating profit of £110m, which helped to keep the overall pre-tax loss to £87.6m. The loss also included one-off costs such as the £92m bill for a major reorganisation announced in August that resulted in 7,000 job cuts . The Covid drag on stores in city centres and transport hubs – where trade has been hit by the shift to working from home – was offset by brisker sales in suburban branches with car parks. The food business has also been buoyed by its recent tie-up with the online grocer Ocado . While trading in the retailer’s shops was affected by coronavirus measures, shoppers flocked to its website, where sales surged 34% as Britons bought new working from home wardrobes. Sales of women’s pyjamas and gym gear jumped 175% and 200% respectively while men’s knitwear sales were up 81%. The online boost, however, was not enough to offset the impact of the lockdown on its large store network.

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Conclusion (100 word) Marks & Spencers is a leading retailer of clothing, food, home ware and financial services. Marks & Spencer is one of the UK’s leading retailers with over 21 million people visiting their stores each week. However, in the fiercely competitive market environment, operational management strategies are quite important for retailers to obtain a competitive advantage and access to greater income. It could supply goods whatever customer needs timely whether it is the variety of food products or clothing style.

COB S2

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