Tough Decisions at Marks and Spencer SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Tough Decisions at Marks and Spencer
In 2007, under the leadership of CEO Stuart Rose, the iconic British retailer Marks and Spencer, with great fanfare, announced its "Plan A" initiative. Based on the five essential pillars of climate change, waste, sustainable materials, fair partnership, and health, the plan sought to transform the company's practices. By 2012, the program's aim was to ensure that M&S was carbon neutral and sent no waste to landfill. It also aimed to help its customers and employees achieve a healthier lifestyle, and to improve the lives of all involved in the company's supply chain with fair wages, as well as improved working hours and conditions. Called Plan A "because there is no Plan B," the company identified 180 projects to improve the sustainability of its operations and business practices in anticipation of the need for a very different business model in the future. Key aspects of Plan A included more sustainable sourcing and influencing the business practices of the company's supply chain; communication to employees, customers and investors; and employee engagement. The case concludes with the tradeoffs involved in the decision of whether or not to install refrigerator doors in the grocery section of its stores. While the energy savings and reduced carbon emissions are relatively clear and easy to measure, the impact on customers and revenues is harder to assess.
Authors :: Robert G. Eccles, George Serafeim, Kyle Armbrester
Swot Analysis of "Tough Decisions at Marks and Spencer" written by Robert G. Eccles, George Serafeim, Kyle Armbrester includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Plan Spencer facing as an external strategic factors. Some of the topics covered in Tough Decisions at Marks and Spencer case study are - Strategic Management Strategies, Communication, Competitive strategy, Decision making, Motivating people, Social responsibility, Supply chain, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Tough Decisions at Marks and Spencer casestudy better are - – increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization,
talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Tough Decisions at Marks and Spencer
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tough Decisions at Marks and Spencer case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Plan Spencer, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Plan Spencer operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Tough Decisions at Marks and Spencer can be done for the following purposes –
1. Strategic planning using facts provided in Tough Decisions at Marks and Spencer case study
2. Improving business portfolio management of Plan Spencer
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Plan Spencer
Strengths Tough Decisions at Marks and Spencer | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Plan Spencer in Tough Decisions at Marks and Spencer Harvard Business Review case study are -
Innovation driven organization
– Plan Spencer is one of the most innovative firm in sector. Manager in Tough Decisions at Marks and Spencer Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Plan Spencer has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Tough Decisions at Marks and Spencer HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Plan Spencer are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Successful track record of launching new products
– Plan Spencer has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Plan Spencer has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Organizational Resilience of Plan Spencer
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Plan Spencer does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Tough Decisions at Marks and Spencer Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High switching costs
– The high switching costs that Plan Spencer has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Superior customer experience
– The customer experience strategy of Plan Spencer in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Leadership & Managing People field
– Plan Spencer is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Plan Spencer in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Plan Spencer digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Plan Spencer has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High brand equity
– Plan Spencer has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Plan Spencer to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Plan Spencer is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Tough Decisions at Marks and Spencer | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tough Decisions at Marks and Spencer are -
Lack of clear differentiation of Plan Spencer products
– To increase the profitability and margins on the products, Plan Spencer needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Plan Spencer supply chain. Even after few cautionary changes mentioned in the HBR case study - Tough Decisions at Marks and Spencer, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Plan Spencer vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Tough Decisions at Marks and Spencer, is just above the industry average. Plan Spencer needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High cash cycle compare to competitors
Plan Spencer has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Plan Spencer, firm in the HBR case study Tough Decisions at Marks and Spencer needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Tough Decisions at Marks and Spencer, it seems that the employees of Plan Spencer don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Tough Decisions at Marks and Spencer, in the dynamic environment Plan Spencer has struggled to respond to the nimble upstart competition. Plan Spencer has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Plan Spencer is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Plan Spencer needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Plan Spencer to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert G. Eccles, George Serafeim, Kyle Armbrester suggests that, Plan Spencer is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Products dominated business model
– Even though Plan Spencer has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Tough Decisions at Marks and Spencer should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Tough Decisions at Marks and Spencer has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Plan Spencer 's lucrative customers.
Opportunities Tough Decisions at Marks and Spencer | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Tough Decisions at Marks and Spencer are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Plan Spencer is facing challenges because of the dominance of functional experts in the organization. Tough Decisions at Marks and Spencer case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Plan Spencer can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Tough Decisions at Marks and Spencer, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Plan Spencer can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Plan Spencer can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Plan Spencer to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Leveraging digital technologies
– Plan Spencer can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Developing new processes and practices
– Plan Spencer can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Plan Spencer can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Plan Spencer can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Tough Decisions at Marks and Spencer suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Better consumer reach
– The expansion of the 5G network will help Plan Spencer to increase its market reach. Plan Spencer will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Loyalty marketing
– Plan Spencer has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Plan Spencer to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Plan Spencer to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Plan Spencer in the consumer business. Now Plan Spencer can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Plan Spencer can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Tough Decisions at Marks and Spencer External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tough Decisions at Marks and Spencer are -
High dependence on third party suppliers
– Plan Spencer high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Plan Spencer.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Plan Spencer in the Leadership & Managing People sector and impact the bottomline of the organization.
Consumer confidence and its impact on Plan Spencer demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Tough Decisions at Marks and Spencer, Plan Spencer may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Plan Spencer business can come under increasing regulations regarding data privacy, data security, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Plan Spencer needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology acceleration in Forth Industrial Revolution
– Plan Spencer has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Plan Spencer needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Regulatory challenges
– Plan Spencer needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Plan Spencer can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Tough Decisions at Marks and Spencer .
Environmental challenges
– Plan Spencer needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Plan Spencer can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Weighted SWOT Analysis of Tough Decisions at Marks and Spencer Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Tough Decisions at Marks and Spencer needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Tough Decisions at Marks and Spencer is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Tough Decisions at Marks and Spencer is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Tough Decisions at Marks and Spencer is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Plan Spencer needs to make to build a sustainable competitive advantage.