Essay on Mark & Spencer: Strategic & Financial Challenges Under New CEO Roger Holmes

Introduction

Mark and Spencer were previously successful in their retail business until the late 1990s up to the early 2000s when they started experiencing strategic and financial challenges. These problems were as a result of the new CEO Roger Holmes's implied strategies that turned out negative to the effect of the business operation. Holmes was blamed for being too nice to the customers and other stakeholders and forgetting the main aim and strategic direction of the business, which was to maximize profits and minimize costs in the long run. He was seen as a disappointment to the retail operations since much was expected of him to deliver the best services to the thriving and recovery of the business. This was in the year 2003, and more concerns were raised that the business recovery had been seriously faltered.

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Holmes was also blamed for his laggard nature. He took too long to make decisions. Some organizational challenges needed quick decision making to give solutions to the problem at hand. Still, Holmes failed in that since he took too long to make and implement the decisions for the effective running and operation of the M&S retail business. Nonetheless, M&S CEO, Holmes lacked relevant experiences. He had no time in his life events from where he could gather chief executive officer skills and expertise on how too head and run an entire organization.

As for Mark and Spencer, they needed someone equipped with managerial skills to revive a low-performing business to something that could outdo their competitors and stand out as the best-performing retail business. That is the dream of every business and organization, to be recognized worldwide and deliver the best quality services to their consumers and earn goodwill from the general public. Holmes was blamed for having no idea of the relevant competencies and skills that could be implemented to rescue the business from losing its meaning and incurring losses. Instead of profits, M&S incurred losses throughout that period when Holmes was the CEO. M&S was at its decline phase and needed the relevant skills n how to restore it to normal. The changing business environment was a key concern for Mark and Spencer to identify the emerging trends and the changing patterns other businesses were adopting to sustain them in the industry. Mark and Spencer had lost their competitive advantage, and customers raised countless complaints about the unchanging remedial to meet their tastes and preferences.

Another strategic problem was out of the complicated structure. Holmes's flat and operational structure complicated the performance of the entire Mark and Spencer business. His type of structure eliminated the line managers, and they operated on only 19 committee members. He did not involve the relevant stakeholders who could have helped in Mark and Spencer's business decision-making. Holmes launched &more, which he thought could be beneficial to the cardholder customers. He also believed that the idea could help users earn points that could be redeemed in every given interval. However, this did not turn out as per Holmes's expectations. Instead, it complicated the whole process.

One of the insiders commented that Roger Holmes was good and liked by everyone and that he is a good management consultant but not a clothing retailer. That meant that Holmes was trained and skilled, yes, but not in the clothing sector. He had no idea of how clothing and retail business was managed. He did not have the required relevant skills that every clothing retailer may exhibit in that kind of business. His efforts were to ensure that Mark and Spencer recovered from the recession, but what failed him were the skills he lacked in that sector.

Why Rose Found Success for M&S

At the age of 55, Rose became the CEO of Mark and Spencer, having Myners as the chairman. He had many years of retailing experience, unlike Roger Holmes, who was not experienced in the clothing retail business. Rose had worked for Mark and Spencer as a trainee and later progressed to the senior executive for over 17 years. This is what made him find success in the declining M&S retailing business. The business had declined and required only an individual with relevant skills as Roe to make it stand out again and earn its competitive advantage. Rose had had also worked as the head of Burtons menswear and subsequently women's retailers, Evans, and Principles.

Rose was known for his hard work. He was involved in the sale of Argos, the catalog chain, which was the merger of Booker cash and carries. Rose transformed the Arcadia group before selling it to Green. His hard work made him achieve all these and secure 25 million dollars for himself. That is to say, and he aligned his personal goals with the M&S strategic goals. In the same spirit, he let the M&S board during his inauguration know about his hard work and a dream job, where he discussed his ideas for new ranges and competitive pricing enthusiastically. A little of this could be seen in Holmes during his reign as the CEO of M&S since he had no strategies for running a clothing retail business. This is where Rose outshined him

Rose’s success for M&S was due to his organized nature. Along with him, he brought his colleagues Charles Wilson to run logistics and Steven Sharp to oversee operations. Unlike Holmes, Rose was ready and planned for the work. He was ready to deliver the best of services since that was his dream job, and he had full motivation for pursuing it. He had drawn plans on how to recover the business and revive its underperformance. With his plans in the place, he was prepared well enough to bring back the business' customers who had left because of Holmes' inability to consider their concerns.

Rose's colleagues gave him appealing complements, which were later echoed by his investors. They said Rose was capable of building morale, comfortable with analysts and shareholders. He was widely known for ding simple things in a good manner that generated a positive outcome as a result. Colleagues described him as nice, quiet, and ruthless. On the other hand, Holmes, when he was the M&S CEO, got complimented on by an insider who said Roger was good yes, but not in management of clothing industry. He lacked relevant experience and strategic skills.

Mark and Spencer regained their success because the CEO, Rose, took M&S's trading problems as his priority. He began by making culture changes, improving decision-making accountability, and revitalizing clothing to get back in touch with the core customers. Cultural changes of M&S involved defining the business's core values and clarifying them to the employees and stakeholders at large. This streamlined how these employees related the business values and behaviors with daily activities and behavior. Rose aligned culture with strategy and M&S scope, the processes involved, and the people in the entire industry that were involved. Rose also took much of his time in planning and drawing the strategies which could provide direction to the scope of M&S. On the other hand, Roger Holmes could not achieve this since he had no strategy on planning and prioritizing business objectives due to his inability to make quick decisions and implement them. In as much as he had good initiatives and ideas, they could not fit the clothing industry.

Rose achieved the success of M&S because his defense was hinged on dealing with Holmes's initiatives. He started by analyzing each one at a time. He realized that there were too many initiatives that were not adequately analyzed in the direction and scope of the business. Rose felt that his predecessors had focused too much on management processes instead of products and costs. He criticized them for lack of growth beyond the city borders. Rose emphasized that there had to be product differentiation to win the hearts of customers due to the stiff competition that was in the market. Rose was the new hope who could bring light to the life cycle of M&S.

Shareholders got encouraged since Rose was determined to see M&S at the top-notch. He addressed the weaknesses in the quality and retail experience of senior management. In reversing Holmes' initiatives, Rose closed all the continuously underperforming Life stores, which customers had branded as pricey and too contemporary. He also announced a deal with HSBC, which had acquired M&S's financial division for 762 million dollars, with M&S retaining 50 percent of future profits until 2014. Rose believed in departmental coordination for its success, which was not implemented by his predecessors. There was a lack of innovation applied to the business and no clear pricing strategy.

Conclusion

The success of Mark & Spenser lied in strategic planning, goal alignment, relevant experiences and expertise, and innovation to gain its competitive advantage. Rose, during his regime in M&S, was able to achieve this and revive the business from its recession, which had been a tough task for his predecessors since they lacked these skills and were ignorant of the market changes.