This is a case study assignment of ANALYSIS OF BUSINESS SUSTAINABILITY APPROACHES. The topic for this is MARK AND SPENCER and their PLAN A, sustainability program. I Have the assignment outline with all the details but I'm adding up whats required.1. The assignment structure should be as by the outline.2. There are 8 lecture slides and points should be used only from them.3. Proper referencing.the assignment needs to be precise and including every aspect of critics on how they successfully managed capitals and created sustainability value for their stakeholder through its plan A.Im Attaching the CASE, outline for the assignment and in total 7 slides to be followed.
709-018-1 Marks & Spencer The Business Case for Plan A Case study Reference no 709-018-1 This case was written by Dr Heiko Spitzeck, Doughty Centre for Corporate Responsibility, Cranfield University, School of Management. It is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation. The case was made possible by the co-operation of Richard Gillies, Head of Plan A, Marks & Spencer. © 2009, Cranfield University, School of Management. No part of this publication may be copied, stored, transmitted, reproduced or distributed in any form or medium whatsoever without the permission of the copyright owner. Distributed by The Case Centre North America Rest of the world www.thecasecentre.org t +1 781 239 5884 t +44 (0)1234 750903 All rights reserved f +1 781 239 5885 f +44 (0)1234 751125 e
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[email protected] case centre U sa ge p er m itt ed o nl y w ith in th es e pa ra m et er s ot he rw is e co nt ac t i nf o@ th ec as ec en tre .o rg Ta ug ht b y Ji ll B am fo rth , f ro m 2 3- Fe b- 20 18 to 2 7- M ay -2 01 8. O rd er re f F 31 85 27 . P ur ch as ed fo r u se o n th e B us in es s A na ly si s & R is k, a t S w in bu rn e U ni ve rs ity o f T ec hn ol og y, A us tra lia . E du ca tio na l m at er ia l s up pl ie d by T he C as e C en tre C op yr ig ht e nc od ed A 76 H M -J U J9 K -P JM N 9I O rd er re fe re nc e F3 18 52 7 709-018-1 2 Marks & Spencer – The Business Case for Plan A HEIKO SPITZECK Doughty Centre for Corporate Responsibility Cranfield School of Management Cranfield University, United Kingdom
[email protected] This case was written by Heiko Spitzeck, Cranfield University, School of Management, Doughty Centre for Corporate Responsibility (www.doughtycentre.info). It is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation. The case has been compiled from publicly available sources and interviews with Marks & Spencer representatives.1 Introduction Switching on his computer at 8:15 am on Thursday, 10th of July 2008, Richard Gillies, Director at Marks & Spencer for Plan A – the group’s ambitious sustainability strategy, finds an email by the CEO titled “Create the business case for Plan A” in his inbox. One day before, investors challenged the Plan A activities at the Annual Meeting in London especially because of the grim economic outlook for the next year. Richard is further asked to prepare a short input for discussion on the economic benefits of Plan A held at the CEO’s office in the afternoon.2 General company background Marks & Spencer (M&S) is one of the UK’s leading retailers, with over 21 million people visiting M&S stores around the country every week. The company offers clothing and home products, as well as food to its clients in 35.000 product lines and employs over 71,000 people in the 622 UK stores. Marks and Spencer’s global supply chain includes 2,000 factories; 20,000 farms and 250,000 workers. History3 The story of Marks & Spencer began 1884 when Michael Marks, a peddler, opened his first stall on a trestle table in Leeds. He called his business “penny bazaars” as all across there where signs reading: “Don’t ask the price, it’s a penny.” The founder laid an emphasis on value for money. Thomas Spencer joined the company in 1894. The partnership went very well and soon stores were opened in Manchester (1894) and London (1899). In the 1920s M&S adopted the then revolutionary policy of buying directly from manufacturers in order to save costs and eliminate wholesale dealers. To improve customer service M&S guaranteed to take unwanted products back for a full return, no matter how long ago the product was bought. Also the value for money spirit was embodied in a price limit policy of five shillings per item issued in 1927. 1 © 2009 Heiko Spitzeck, Cranfield School of Management, Doughty Centre for Corporate Responsibility, www.doughtycentre.info. All rights reserved. 2 While the framing of this case study (sections: introduction, alternative ways forward and the meeting with the CEO) are fictitious as they are intended to foster student imagination and discussion, the facts presented on M&S and Plan A are accurate. 3 References on the history of Marks & Spencer were taken from Khatri (2007) and Bevan (2007). U sa ge p er m itt ed o nl y w ith in th es e pa ra m et er s ot he rw is e co nt ac t i nf o@ th ec as ec en tre .o rg Ta ug ht b y Ji ll B am fo rth , f ro m 2 3- Fe b- 20 18 to 2 7- M ay -2 01 8. O rd er re f F 31 85 27 . P ur ch as ed fo r u se o n th e B us in es s A na ly si s & R is k, a t S w in bu rn e U ni ve rs ity o f T ec hn ol og y, A us tra lia . E du ca tio na l m at er ia l s up pl ie d by T he C as e C en tre C op yr ig ht e nc od ed A 76 H M -J U J9 K -P JM N 9I O rd er re fe re nc e F3 18 52 7 709-018-1 3 As suppliers are of critical importance to the pricing and the quality of goods M&S decided in 1946 to fund a department to assist manufacturers in the modernization and technical advances of their production. Throughout the years M&S handled the relationship with suppliers as carefully as on the client side. Values The success of Marks & Spencer has been built on a number of core company values that have remained almost unchanged since the earliest beginnings.4 They are: Quality Delivering excellent standards consistently Value We need to deliver exceptional value to our customers Innovation We need to continue to be at the forefront of innovation in both general merchandising and food. Trust We are the most trusted retailer. We have a proud heritage of staff welfare, customer care and involvement in the community. We want to continue to build this. Service Is about delivering the highest standard of services to our customers. Recent developments Sir Stuart Rose was appointed CEO in 2004 and immediately faced a bitter, hostile take‐ over battle with Sir Philip Green, head of Bhs. At the time of his appointment, M&S had experienced several years of falling sales and profits. In a Harvard Business Review article Rose commented on what happened: “After achieving record profits in 1998, Marks & Spencer lost sight of what had made it a beloved British retailer for a century – and as a result, profitability plummeted by 85%.”5 Rose has reversed this trend and Marks & Spencer announced profits over £1bn in 2008.6 Year Sales Profit before tax 2007/08 £ 9.0bn £ 1,007bn 2006/07 £ 8.6bn £ 965,2m 2005/06 £ 7.8bn £ 751,2m 2004/05 £ 7.5bn £ 505,1m 2003/04 £ 8.3bn £ 781,6m 2002/03 £ 8.0bn £ 677,5m 2001/02 £ 8.1bn £ 335,9m However, several societal as well as economic trends are expected to have serious influence on the success of M&S in the years to come. 4 The Value Statement has been taken from http://www.marksandspencer.com/gp/node/n/45863031 (accessed 08.09.2008). 5 See Rose (2007). 6 Numbers taken from the M&S How We Do Business Reports 2007 and 2008, as well as Khatri (2007). U sa ge p er m itt ed o nl y w ith in th es e pa ra m et er s ot he rw is e co nt ac t i nf o@ th ec as ec en tre .o rg Ta ug ht b y Ji ll B am fo rth , f ro m 2 3- Fe b- 20 18 to 2 7- M ay -2 01 8. O rd er re f F 31 85 27 . P ur ch as ed fo r u se o n th e B us in es s A na ly si s & R is k, a t S w in bu rn e U ni ve rs ity o f T ec hn ol og y, A us tra lia . E du ca tio na l m at er ia l s up pl ie d by T he C as e C en tre C op yr ig ht e nc od ed A 76 H M -J U J9 K -P JM N 9I O rd er re fe re nc e F3 18 52 7 709-018-1 4 Societal Outlook The retailing business is dependent on certain input factors which are influenced by general trends in society: (1) Energy for lighting, cooling, and heating of the stores and office buildings. (2) Water for cooling fish and other food, for the shop infrastructure and for production down the supply chain. (3) Disposal of waste like food waste or packaging materials. (4) Consumers ‐ most essentially people need to buy products and retailers have to be aware about what they are looking for. In the following section, trends in these four areas will be outlined in more detail. Energy In January 2008 the price for a barrel of crude oil went beyond $100 for the first time in history. Oil prices started rising significantly from the beginning of the Iraq war and this has impacted production and transport costs. UK drivers rallied to protest in June 2008 when the oil price peaked at $139 putting the government under pressure to act.7 Even if the price has gone down by September 2008 to $107 a barrel there is a clear upward trend. Also it seems very likely that the UK government will introduce a carbon trading scheme for retailers in order to meet its CO2 emission targets. M&S consumption of energy and CO2 footprint (incl. business travel, refrigerants, etc.) has been the following in recent years: Year 2005/2006 2006/2007 2007/2008 Energy use 910 gWh 913 gWh 1081 gWh CO2 Emissions n.a. 517,000 t 469,000 t Water "Globally, water usage has increased by six times in the past 100 years and will double again by 2050, driven mainly by irrigation and demands of agriculture. Some countries have already run out of water to produce their own food. Without improvements in water 7 Figure taken from http://www.crudeoilprice.com/Crude-oil-price-1970-to-2008.gif (accessed 01.09.2008). U sa ge p er m itt ed o nl y w ith in th es e pa ra m et er s ot he rw is e co nt ac t i nf o@ th ec as ec en tre .o rg Ta ug ht b y Ji ll B am fo rth , f ro m 2 3- Fe b- 20 18 to 2 7- M ay -2 01 8. O rd er re f F 31 85 27 . P ur ch as ed fo r u se o n th e B us in es s A na ly si s & R is k, a t S w in bu rn e U ni ve rs ity o f T ec hn ol og y, A us tra lia . E du ca tio na l m at er ia l s up pl ie d by T he C as e C en tre C op yr ig ht e nc od ed A 76 H M -J U J9 K -P JM N 9I O rd er re fe re nc e F3 18 52 7 709-018-1 5