Marks & Spencer Resources, Capabilities & Competitive Advantage
Marks & Spencer
Resources, Capabilities & Competitive Advantage
Compiled for Paull Robathan.
Author: Kerry Sheehan
Monday, 02 February 2004
1EXECUTIVE SUMMARY
In the period up until the mid 1990's M&S had a market leading share of the clothing market. They used their resources and subsequent capabilities to exploit their differences from the competitors and create competitive advantage by:
*Empowering suppliers/manufacturers with design responsibility
*Closely managing supplier relationships
*Brand management
*Excellent customer service
*Excellent working conditions
*Their Britishness
Through these unique policies they created CA and profitable growth.
Richard Greenbury become Chair man and proceeded with a strategy that was inward focussed and paid scant regard for the external environment, particularly that of its competitors and customers!
His poor understanding of the external environment and complacency in underestimating it meant M&S could not maintain their fit between their organisational resources and capabilities and the significant changes in both the external and competitive environment. The time to make changes was when M&S were at the top and had the resources to do so but Greenbury failed to realise the threat and did not react.
On appointing Luc Vandevelde, M&S should recommend the following strategies are pursued to correct Greenbury's failings:
*Restate the corporate values of quality, value & service
*Implement rigorous supplier quality audits
*Encourage participative management
*Implement new supplier partnerships outside of UK
*Employ Design Director with responsibility for seasonal ranges
oTarget individual fashion groups with individual ranges
oPartnerships with recognised designers
Contents Page
1Executive Summary2
2Introduction4
2.1The Clothing Market4
3Part A5
3.1Resources5
3.2Tangible6
3.3Intangible Resources6
3.4Human resources7
3.5Capabilities7
3.6Sources of Competitive Advantage8
3.6.1First Mover
Resources, Capabilities & Competitive Advantage
Compiled for Paull Robathan.
Author: Kerry Sheehan
Monday, 02 February 2004
1EXECUTIVE SUMMARY
In the period up until the mid 1990's M&S had a market leading share of the clothing market. They used their resources and subsequent capabilities to exploit their differences from the competitors and create competitive advantage by:
*Empowering suppliers/manufacturers with design responsibility
*Closely managing supplier relationships
*Brand management
*Excellent customer service
*Excellent working conditions
*Their Britishness
Through these unique policies they created CA and profitable growth.
Richard Greenbury become Chair man and proceeded with a strategy that was inward focussed and paid scant regard for the external environment, particularly that of its competitors and customers!
His poor understanding of the external environment and complacency in underestimating it meant M&S could not maintain their fit between their organisational resources and capabilities and the significant changes in both the external and competitive environment. The time to make changes was when M&S were at the top and had the resources to do so but Greenbury failed to realise the threat and did not react.
On appointing Luc Vandevelde, M&S should recommend the following strategies are pursued to correct Greenbury's failings:
*Restate the corporate values of quality, value & service
*Implement rigorous supplier quality audits
*Encourage participative management
*Implement new supplier partnerships outside of UK
*Employ Design Director with responsibility for seasonal ranges
oTarget individual fashion groups with individual ranges
oPartnerships with recognised designers
Contents Page
1Executive Summary2
2Introduction4
2.1The Clothing Market4
3Part A5
3.1Resources5
3.2Tangible6
3.3Intangible Resources6
3.4Human resources7
3.5Capabilities7
3.6Sources of Competitive Advantage8
3.6.1First Mover
References: M&S were still the number one retailer in the UK by a good margin yet their share had been falling (Deutsche Bank 2002) . Resources and capabilities internal to the organisation are the main vehicle for achieving superior performance (Grant, 2002, chp 5).