Marks & Spencer (A) Nardine Collier The M&S formula for success Michael Marks began his penny bazaars in the late 1880s. He soon decided he needed a partner to help run the growing firm and Tom Spencer, a cashier of Marks’ supplier, was recommended. From this partnership Marks & Spencer (M&S) steadily grew. Simon Marks took over the running of M&S from his father, turning the penny bazaars into stores, establishing a simple pricing policy and introducing the “St Michael” logo as a sign of quality. There was a feeling of camaraderie and a close-knit family atmosphere within the stores, with staff employed whom the managers believed would “fit in” and become part of that family. The staff were also treated better and paid more than in other
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For example, since it was known Greenbury did not want M&S to be at the cutting edge of fashion, buyers concentrated on the types of product they knew he would like-“classic, wearable fashions”. There were other problems of centralised authority. On one occasion Greenbury had decided that to control costs there would be less full-time sales assistants. Although this led to an inability in stores to meet the service levels required by M&S, when Greenbury visited, all available employees were brought in so that it appeared the stores were giving levels of service that, at other times, they were not. It also meant there was little disagreement with directives from the top, so policies and decisions remained unchallenged even when executives or store managers were concerned about negative effects. Customer satisfaction surveys that showed decreasing satisfaction throughout the late 1990s were kept from Greenbury by senior executives who felt he might be annoyed by the results.
A hitch in the formula M&S’s problems began to hit the headlines in October 1998 when it halted its expansion programme in Europe and America and in November announced a 23 per cent decline in first-half profits, causing its shares to fall drastically. Greenbury blamed a turbulent competitive environment, saying that M&S had lost sales and market share to its competitors from both the top and