Introduction
Marks and Spencers company can trace its origin history back in 1882.The company started after “immigrant pedlar Michael Marks set up his first market stall in Kirkgate. Open Market in Leeds England after being lend 5 pound by a wholesaler named Issac Dewhirst to start a pedlar”(Bevan 3). Mr Michael marks was insufficient in English language and he knew that in order to be successful in his business he had to hide this weakness in order to attract to attract more customers. He therefore created a slogan saying “ Don’t ask the price it’s just a penny”(Sanders 7). The small market stall gained a lot of popularity. In 1894, Tom Spencer who used to work as a cashier in one of the firms owned by Mr Dewhirst who used to be Mark’s supplier left the firm and joined Mr Mark as one of the partners of the Market Stall. This was a major boost for the Market stall in that Mr Spencer was more fluent in English in that he was an Englishman. This helped the market stall more appealing to its customer because the communication skills were better. However, the partnership faced its first major challenge after eleven years of the partnership when Mr. Spencer retired. He preferred to go back to the farms and be “a gentleman farmer”(Bevan 6).
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The departure of Mr Spencer cause Mark to devise more strategies to be able to attract more customers. Unlike other companies in England, Mark wrote on his store front “admission free”(Sanders 9). This caused the customer to be more at ease shopping and window shopping at his store. Due to this slogan the popularity of his store continued to be on the up rise. By 1902, the store had developed tremendously that it “was the kind of array that could greet the queen of England(Bevan 8). However there was a sudden shift of the whole managerial structure of the company after Mr Mark fell ill in 1902. The company was taken over by his son Simon Marks. Unlike his father, Simon Marks lacked good leadership qualities. “He was the kind of manager who would terrorize his employees by throwing garments on the floor and crying out ‘ why are you trying to ruin my business”(Bevan 10). He was not patient at all. The company faced great hardships during his first year as its director. However in 1903, Simon Marks met Lord Sieff from Israel who agreed to form a partnership with him in this business. Five years later,Michael Mark his father died. Tom spencer died in the same year. Though the company lost its founding fathers it had nothing to lose. Lord Sieff had excellent managerial skills that the company required in order to flourish. The company was in the right hands. In 1908, Lord Sieff advised Simon to appoint Mr William Chapman as the director of the company since he had noted that Simon was a very arrogant person which is an undesirable trait for business leadership. However Simon was flexible enough and he accepted it. By 1909 the company had become a limited company with a capital of more that 30,000 pounds. The company enjoyed profits of more than 6800 pounds from thirty six bazaars and shops by this time( Sander 15).
As time moved on, Simon Mark was acquiring more skills in the management of the company and in 1916 he assumed the role of both director and Chairman of the company. In 1924, Simon felt that the company would generate more income if it started to have international markets. He took his first trip to America that year in order to assess the probability of starting stores abroad. In 1927, Lord Sieff assumed an active role in the company by joining Simon in England. They both assume the role of directors of the company and puts the company on the stock Market with a capital of more than 500,000 pounds. Unlike other companies that were hardly hit by the Great depression in 1930 this comapny continued to flourish and to increase the number of its stores. By 1935, the company was enjoying profits worth more than 1 million pounds. By 1939 they had more than 234 stores in operation. However, they lost 16 stores after they were destroyed by bombing between 1939 and 1945 because World War II was going on at this time.
In 1956, the company began to embrace modern technology at the time like typewriters and other machine s to quicken its operations. This led to a significant cut in number of the members of staff of the company. However this was a huge strategy for the company to be able to minimize its costs and increase output. This is reflected in the amount of profit that was recorded in 1957 that was about 10 million pounds. The company faced the other huge blow after it lost Simon as one of its directors after he died in 1964. Lord Sieff became to sole director. In 1965 the company recorded a profit of 25 million pounds meaning that the lose of Simon did not have a significant financial impact on the company. However Lord Sieff felt that if he continued to run the company as a sole proprietor, he would be deficient of new entrepreneurial ideas.In 1966, he decided all the shareholders to enjoy full voting rights. Edward Sieff assumed the chairman sit in the company in 1967 after the share holders were given full voting rights. However, Lord Sieff assumed the top position again in 1972. The alternation of leadership position allowed the flow of new ideas of innovation in the company. This is reflected in 1974 when the company owned 55% of Peoples Departmental Stores in Canda(Bevan 23). This shows that ideas of expanding the business market to international levels was beginning to bear fruits. One of the huge achievement was the opening of the first store in Europe in Paris,France.
The company faced a huge problem that would threaten it existence in 1982 when a corruption scandal over housing arrangement of its directors was discovered. All these directors were removed from the leadership positions because their actions were beginning to tarnish the good name of the company world wide. As a preventive measure, the company formed a financial wing of the company in Chester in 1984 that would monitor all the financial activities of the company in order to ensure maximum output. In 1988, the company was able to start its operation in the United States when it bought Brooks Brothers Menswear chain store for 750million dollars(Sander 32). By 1990, the profits of the company were more than 500 pounds. By this time, the total food sales were more than 2 billion sterling pounds.
In 1993, the advertising engines of the company increased. The Sunday Times “ carrier spread on M&S clothes”(Sander 33). In 1994, Richard Greenbury become the managing director of the the company and appointed four directors who reported directly to him. This was the source of the famous Greenbury report in 1995 that was concerned about the “fat cheques” that executives of various companies in the United Kingdom received. In 1997 the company announced profits of 1 billion sterling pounds. Due to these profit margins, the company announced an expansion plan of 2 billion Sterling pounds(Bevan 37).
However, in 1998, the company started experienced a decline in profit margins. In November 1998, the half year profits recorded a 23 percent fall compared to 1997. Many stakeholders in this company started to be very discontented by the leadership of Richard Greenbury and Keith Oates one of the shareholders of the company tried to bring up a coup in the boardroom after a meeting of the board of directors. One month later Peter Salsbury was appointed as the chief executive. In January 1999. the shares of the company fell by 23 percent(Bevan 41). By May that year the total profits had fallen by 50 percent. In June that year, Richard Greenbury had no other option than to resign because it was clear that he was not taking the company anywhere. In the year 2000, the company had a new interim chairman Brian Baldock. The situation continued to get worse and in 2001 the company announced Continental store closures which led 4400 people to lose their jobs. The headquarters of the company were moved Baker street to Paddington Basin in the same year(Bevan 43).
Lucky enough, by 2002 the company had been able to solve all its leadership squabbles and its profits rose sharply. In fact, 20 food outlets were opened that year. In 2003 Vandevelde is appointed as the chairman of the company and corruption cases in the company began to emerge. The price of the shares of the company fall terribly and Vandelvelde decides to step down. Stuart Rose , the executive director at the time is accused of illegally purchasing shares in the company and investigations are put in place. In 2004, Paul Mayners is appointed to be the interim chairman of the company. However he does not deliver. Shares fall by 48 percent during this period. He is succeeded by Terence Burns in 2005. One year after his appointment, Terence is able to lead the company to recovery such that in November 2006, the company had realized half year profits of 400 billion pounds and yearly profits of 1 billion pounds(Bevan 50). By 2007 the company had recovered completely and was now not worried about its profit generation but how its production would be Eco-friendly. Today, the company owns 895 stores in more than 40 countries all over the globe(Sander 63).
Conclusion
In conclusion, it is clear from the report about Marks and Spencers company that a business unit is always successful if effective managerial strategies are put in place. Profits will always be realized if the company has good leadership. However if a business is in the hand of corrupt individuals as it was the case in the late 21st century the company will always go down in that there will always be cases of misappropriation of funds that would have been used to steer the company forward. It is also evident from the humble beginnings of Marks and Spencer company that for any business unit to be successful, the entrepreneur who has the idea to continue with the business has to be a risk take and a person of hope in order to succeed. Michael Mark started his business in a country that he was not even sure that he was going to succeed but in the end, though he never saw the fruits of his company, the company turned out to become a multimillion company that would come to benefit not only the people of England but people from all over the globe.
Works Cited
Bevan, Judi. The Rise and Fall of Marks and Spencer:. And How it Rose Again. London: Profile Books Limited, 2007. Print.
Sanders, Meg. Marks & Spencer trade Secrets : everything You Will Ever Need To Know About Everything. WestMinister: Marks & Spencer Publishers, 2002. Print.