competitive advantage and corporate governance—shop soiled and needing attention! the case of...

Graham BeaverProfessor of Business Development, Departmentof Strategic Management and Marketing,Nottingham Business School, The NottinghamTrent University, NG1 4BU

Competitiveadvantage andcorporategovernanceÐshop soiled andneeding attention!

The case of Marks& Spencer plc

Introduction

Marks & Spencer, for years held up to

be the very model of good corporate

governance and strategic consistency is

in trouble and recovery will not come

easily.

There was blood on the boardroom carpet atMarks & Spencer (M&S) following the undigni-®ed, unprofessional and unnecessary manage-ment succession that is so uncharacteristic ofthis great British retailer. At the end of last yearSir Richard Greenbury announced that he wasvacating his Chief Executive Of®cer (CEO)position, pressured by controversy over hisstewardship. The succession was a full-scalepublic melodrama in several acts that served todevalue the company, damage its reputationand undermine its premier position as the highstreet's most respected organization. Apartfrom begging the question of whether this

testosterone-driven behaviour is the best wayto change the senior management structure ina blue-chip company, the debacle raises doubtsabout the key issue: whether M&S, the verymodel of British retailing, famed for its inno-vative ¯air, can regain its edge against toughcompetition. The opening paragraph takenfrom The Sunday Times Business Focus page(1999b) summarizes the unhappy situation in anutshell.

A Turkish Bank seized job lots of Marks andSpencer clothes last week because one ofthe retailer's franchise partners had run intotrouble. `At least somebody wants theirgoods!' quipped one analyst.

It is not a joke that would have beenmade two years ago when M&S was pushinginto mainland Europe and was acquiring19 Littlewoods stores to further its dominanceof mainstream retailing. M&S is still the biggest

Copyright # 1999 John Wiley & Sons, Ltd. Strategic Change, Sept±Oct 1999

Strategic ChangeStrat. Change, 8, 325±334 (1999)

player on the UK high street and its presencecan make or break a shopping centre.However, after its worst fall in trading and abitter boardroom battle, St Michael's image islooking shop-soiled and needing attention.

Peter Salsbury, the chief executive whoemerged last year from the undigni®ed battleto succeed Greenbury, has made his ®rst radi-cal move to stop the rot. Three board directorswere axed as 31 of the company's top 125executive positions were dropped. Written offby some before he even got the job, SalsburyÐwho was Greenbury's favoured candidateÐappears to be thinking the unthinkable andcould bring in outside brands to retail in M&Sshops.

The St Michael brand name still accounts foran impressive shopping volume, with nearly40% of women's underwear and one in fourmen's suits sold in the UK. However,in February 1999 the company con®rmedfears that pro®ts will almost halve this year.The sales ®gures were also dreadful. Despiteincreasing its ¯oor space by 9%, sales in the 15weeks to 9 February were 6.4% below the sameperiod in the previous year.

Since its shares peaked in October 1997, thecompany has underperformed the FTSE 100index by 52%. It would seem that M&S has gotjust about everything wrong. The managementof the trading campaign in the run-up to Christ-

mas was dire. The company bought too muchstock, priced it too high and then had to slashprices to shift it. By the end of the season itsproducts were looking tired and uninspiringand shoppers stayed away in droves. Industrycommentators have stated that it will take years

to turn the organization around. One leadingretailer is on record as saying that:

A lot of people failed to see how bad thingshave got at M&S. Even if he implements theright policies starting from now, it couldtake Salsbury at least three years to turnthings around.

In the longer term, Salsbury will considerstrategic issues such as the overseas portfolioand the organizational structures necessary tomove forward, but for the moment his priorityis to restore the British chain to corporatehealth. His success in that will be the measureby which he is judged.

The erosion in competitiveadvantage

M&S started out in 1884 as a market stall inLeeds, the `penny bazaar'Ðno need to ask theprice. One hundred years on and it hasbecome part of the British way of life withsome of the most famous doing their shoppingthere. Ì am an enormous fan of M&S; theirclothes are superb. They have sent me upsome suits so that Denis can look at them.'Margaret Thatcher.

It is a matter of record that for someshopping at M&S is a real tradition as typi®edby the following comments taken from shop-pers at the ¯agship Oxford Street store. Ìt'swhere my mother used to buy all my under-wearÐto me it is a total institution.' Ì don't livein this country any more, so that when I cometo Britain, I look forward to going to M&S.'

The company has moved into the nation'sliving rooms, kitchens and personal ®nances.The St Michael brand, which for so long coulddo no wrong, is now showing weaknesses inboth perception and position. First, women'swearÐwhich is such an integral part of theM&S product portfolioÐhas not been sellingwell. That was con®rmed recently with thepublication of the half-year sales and pro®ts®gures. Second, the company was accused ofdeserting Britain when it announced that itwould be sourcing more of its clothes abroad.

M&S is still the biggest playeron the UK high street

M&S has got just abouteverything wrong


326 Graham Beaver

Third, came the boardroom row over whoshould run the business, which contributedsubstantially to damage the already tarnishedreputation and undermine its market standing.

Many critics and retail specialists attributeblame to the company's past success for manyof today's problems. It has been widely

reported in the business press, that it hasmade the organization inward-looking andarrogant and as a result has become out oftouch with many of its customers and whatthey really want. Furthermore it has failed toaccurately monitor and respond to what itscompetitors are doing. The strength of sterlingand the slow-down in retail spending have nothelped, plus the bullish expansion abroad haseaten into pro®ts. However, there are otherreasons why the brand has lost its edge asevidenced by the following customer com-ments recorded just before the run-up to theChristmas 1998 shopping campaign. `Overall,quite good value, but very boring this year.'`The colours are a bit dowdy and everything is abit crowded together.' `I think that it is stillgreat you know: some of the fashions aren'tterri®cally good though.'

This is clearly endorsed by a later commentfrom The Financial Times (1999) that states:

An hour walking round Marks and Spencer'sLondon show-case spring/summer collec-tion leaves you unclear who was meant tobe there.

A 100% man-made camou¯age-patternedshirt: a long sleeveless dress, the colourof which descends from cream to brown,patterns with brown leavesÐyesterday'sofferings show what happens when acompany tries too hard to be trendy . . .After a cliff drop in sales, Marks and Spencer

badly needs customers to return. The rangeis not unwearable, . . . But navigating anM&S store would test a Magellan . . . Thecollection seems desperate, disorganisedand derivative.

One of the most aggressive competitors toM&S is `George', the fashion label at ASDA. Thelabel has been designed and managed byGeorge Davies, the founder of the Next fashionchain. When interviewed on the BBC2` `MoneyProgramme' (29 November 1998), he statedthat one of the problems that M&S have failedto appreciate is the contemporary sophisti-cation of the high street customer, and theirnon-negotiable demands for immediate satis-faction.

The customer looks in the (fashion) maga-zine and will not wait. What they seein January, they want to buy in February,so for a retailer your intelligence has gotto be good to know what the magazinesare going to promote and you have got tohave a structure with your supply partnersthat can cope with ridiculously quick turn-arounds.

Another area where M&S are losing marketshare is food. It would be fair to report thatthe store revolutionized the ready preparedmeals market making dinner parties an easything to organize but their competitors werenot slow to appreciate the substantial pro®tsto be made and have moved aggressively tocapture sales.

The following comment from RichardHyman, the Chairman of `Verdict Research'clari®es the current market position:

Competitors have learned from Marks inproduct development. In food, for example,the gap has been narrowedÐit has notbeen shut. M&S still has a very signi®cantcompetitive edge, but I think that organisa-tions like Tesco and the others, are pro-ducing the kind of value-added foods nowthat were just not available ten years agoand that one could only ®nd in Marks and

Many critics blame thecompany's past success formany of today's problems


The case of Marks & Spencer plc 327

Spencer. I think that that has had somethingof an impact.

Many of the newest M&S shops, especiallythe out-of-town regional centres, incorporatethe very best in retail design but this is not thecase with much of the retail infrastructurewhich many critics have stated look dull along-side some of the more ambitious competition.Across the road from the M&S ¯agship Londonstore is Selfridges, which has recently under-gone a £90m modernization programme. Thefollowing comment from Peter Williams, theFinance Director summarizes the expectationsand needs that the contemporary shopper bothrequires and demands (BBC2 `Money Pro-gramme', 29 November 1998)

They are expecting something differentÐthey are expecting theatre; they are expect-ing to be entertained; they are expecting to®nd somewhere where they can eat; andthey are expecting to ®nd products display-ed to them in an exciting and attractive way,displayed to them as they would expect tosee them in their own home. And also theyare expecting to ®nd a lifestyle which theycan relate to them which we believe willencourage them to purchase.

For all the issues and problems confrontingM&S that need to be addressed, the evidencefrom markets both domestic and internationalsuggests that enduring competitive advantagesin retailing are based on brands and systems,and it is strengths in these areas that havedifferentiated and supported the superiorperformers from the rest.

There are examples where transitory com-petitive advantages have been developed inmodern retailing usually based on clever orinnovative positioning. A good example wouldbe that of George Davies, mentioned earlier,who developed Next. He identi®ed a marketfor stylish clothing for a slightly older age groupof women than fashion retailers were cateringfor. However, two things went wrong withNext, which led to a substantial decline in theirfortunes and a boardroom coup, similar to the

Greenbury affair, which resulted in Davies'departure to the retail wilderness.

The ®rst was that the niche identi®ed wasrapidly invaded by aggressive competition,many of them with stronger retailing skills.Secondly, the company convinced itself thatits success was the result not of a transitorydominance of a neglected market segment,but of a universal management geniusapplicable to a wide range of retail activities.It then went on a spree of acquisition anddiversi®cation and came close to ®nancialoblivion as a result. Ratners made the samemistakes some ten years later (see for exampleHussey, 1998).

It seems clear from the substantial retailsector case evidence that positioning is not asource of sustainable competitive advantagefor any organization because it is easily copied,and therefore undermined. The history ofTesco illustrates the weaknesses of competitivedifferentiation based on positioning advan-tages as it departed from the original `pilethem high and sell them cheap' market philo-sophy in order to create the necessary systemsand brand image to rival and then convincinglyovertake Sainsbury.

In the last Management Today research, inassociation with Nottingham Business School(December 1998), Tesco was again con®rmedas Britain's most admired company, a title that

it has won for the second time. The point thatneeds to be emphasized here is that whenTesco set out to create a brand, it took almost20 years to accomplish its market strength andsuperiority. Sustainable competitive advan-tages invariably take longer to create, and lastlonger too. Market positioning is a competitiveadvantage only when it is matched and sup-ported by that based on organizational systemsand strong brand awareness.

Tesco was again con®rmedas Britain's most

admired company


328 Graham Beaver

This is the paradox of M&S, who for so longhave enjoyed success based on the consistentattention to these crucial areas. In his seminalbook Foundations of Corporate Success, JohnKay (1993) wrote:

Corporate success is based on the distinc-tive capabilities of the ®rmÐthose things,often the product of its particular history,which competitors cannot reproduce evenafter others realise the bene®ts these capa-bilities bring to the company that enjoysthem. Corporations add value when theysuccessfully match these distinctive capa-bilities to the external environment theyface. A ®rm adds value through the distinc-tive character of the relationships it estab-lishes with its stakeholdersÐits employees,customers, shareholders and suppliers.

To its customers, M&S has a reputation forquality, dependability, and no-nonsense shop-ping. Its staff have been encouraged to view thecompany with loyalty and pride but with astrong element of personal empowerment. Inshort, there is a strong M&S organizational para-digm (see for example Johnson and Scholes,1998). In his regular Financial Times column(20 January 1999) John Kay wrote:

With competitive advantages such as thesethere is always a balance to be struckbetween exploiting them in the short runand developing them for the long term. Youcan always increase pro®ts faster thanunderlying sales, for a bitÐby taking fulladvantage of your strong customer franchisein your prices; by putting pressure on yoursuppliers and diversifying your supply re-lationships; by reducing staff numbers andemployment security; by eroding the thingsthat make you different from your compe-titors, the things which were the source ofyour higher pro®ts in the ®rst place.

Perhaps that is what Marks and Spencerdid, as it became leaner, meaner, and moreaggressive in the 1990s. Perhaps today itis starting to pay the priceÐand thatperhaps de®nes the dilemma: does it meet

City expectations for earnings today andtomorrow by pushing these processesfurther and becoming more like its compe-titors? And accept that in the long run, thatwill also lead to the same returns as itscompetitors earn?

There are other writers and industry analyststhat fear that the problems for M&S go beyondthe choices outlined by Kay, and certainly gowell beyond the dif®culties facing the highstreet. The company has been developing itselfas a department store for some time andmoving into ranges, such as furniture, whichsome commentators argue it lacks the exper-tise to handle. One story widely reported tellsthe tale of an M&S branch manager who calledhis opposite number at John Lewis, askingwhat to do with a table that had been scratchedduring home delivery. `Send your Frenchpolisher round,' said the man at John Lewis.The problem was that M&S did not have onebecause it had not thought through the ®nerdetails of selling furniture.

The issue of corporate governance

The board governance fad is being keptalive by a bunch of consultants and acad-emics . . . There is no evidence that boardgovernance matters to shareholders. WhenI see the evidence, I'll take this moreseriously.

This is a verbatim comment from the CEO of anAmerican `Fortune 500' company (McKinsey,1996), and the worrying evidence is that he isnot alone in his scepticism (see for exampleHussey, 1998; K. Glaister, `Recent trends instrategic management research', FinancialTimes Corporate Strategy Workshop, LeedsUniversity Business School, 20 January 1999).Though there are many corporate leaders inBritain and America that ®rmly believe in theimportance of good board governance andhave taken very positive steps to improve theirorganization's governance processes, manyothers still remain doubtful about the bene®tsand necessity of taking action. Other com-



ments from two other CEOs support this posi-tion. `So many other things matter moreÐcompetitors, ®nancials, marketingÐboardgovernance is not on my screen.' `Fund man-agers are very short-term oriented; not muchuse in talking about boards with themÐit's toolong-term an issue.'

The reality is that corporate governance isnot an academic fad, or the latest management

consultancy technique conceived to win morebusiness for the profession. Corporate govern-ance matters and moreover, there is compel-ling evidence to suggest that it is not neutral;i.e. good governance practice really does makea difference, and one that many investors arewilling to pay for. In a McKinsey survey (1996),investors were asked to compare two well per-forming companies (such as those with con-sistent pro®ts and rated number one or two interms of market share) and state whether theywould pay more for the shares of one of thesecompanies if it were well governed. Two thirdsof the investors said that they would. As onerespondent quoted in the survey states: `Com-panies with good board governance practiceshave a shareholder-value focus.'

Among those willing to pay more for goodgovernance, the average premium speci®edwas 16%. There were a minority of those inves-tors who said that they would pay more but feltthat the actual premium was hard to quantify.However, based on the entire survey group,including those who said that they would notpay more, the average premium was 11%. An11% increase in the share price would equateto an increase in earnings before interest andtax (EBIT) of 11% in perpetuity. To put that®gure into perspective, consider the scope andintensity of effort that would be required toearn a similar increase through measures suchas cultural change, cost cutting, ef®ciencymeasures or higher productivity!

When investors were questioned whythey should pay a premium for good govern-ance, three main issues surfaced. First, that awell managed company with positive govern-ance practices will perform better over time,leading to a higher share price. Second, goodgovernance was seen as a means of reducingrisk, as it was believed that it decreases thelikelihood of bad things happening to acompany. Also, when bad things do happen,they expect well-governed organizations tobounce back more quickly taking the appro-priate corrective action. Finally, others regardthe recent attention to governance issues assomething of a fad, but they are prepared topay a premium because the shares of a well-governed company may be worth moresimply because governance is such a majorconcern.

Of all the problems facing M&S, the one thathas been the most damaging has been theconduct and behaviour of its board and thein®ghting over who runs the company.Sir Richard Greenbury, for ten years the M&SCEO was put under substantial investor press-ure to split his roles as both chairman and chiefexecutive and make plain the managementsuccession plans. As stated earlier, PeterSalsbury, Greenbury's preferred choice wasselected as the new CEO in preference to KeithOates, the incumbent deputy chairman after a®ght between the two favourites, with Green-bury remaining as chairman.

The investor pressure for managementchanges came at a time when many believedthat a split had developed on the M&S board.Oates, who was once seen as Greenbury's heirapparent, was plainly at loggerheads with seve-ral senior colleagues and made his dissatisfac-tion known about the current managementcomplexion. He is thought to have made plainhis ambitions to two of the non-executivedirectors in the wake of a 23% pro®ts tumblewhich precipitated a dramatic fall in the shareprice. At the time of Oates's attempt to securesupport, Greenbury was relaxing at the CholaSheraton in Chennai, India. The news reachedthe rumbustious Greenbury who promptly¯ew home fuelling the speculation that board-room acrimony was the principal item on the

Corporate governanceis not an academic fad


330 Graham Beaver

agenda. At the time, one major investor wenton record as saying:

It is time for the non-executive directors tomake Greenbury reveal a succession planand time to see a split in the rolesÐor forthe company to let us know that he is goingto retire in a year's time . . . Corporategovernance issues need to be addressed. Wewould like to feel there is a succession play.We would like to know what is going on. Iexpect the board to manage that. Do I havecon®dence that the Mark's board will get agrip of this? I don't know.

The tradition at M&S has been for thechairman to appoint his successor and thecompany is big on tradition. One friend of theSieff familyÐdescendants of Simon Marks,M&S's founder, said: `The family are hoppingmad about this whole situation. They wantRick (Greenbury) to sort it out now. This is nothow things are done at M&S.'

There is no doubt that Oates had hissupporters both in and out of Michael Housein Baker Street, the company headquarters(dubbed The Kremlin inside the retail indus-try). One supported stated: `He is the onlyserious contender who has ever really had theguts to stand up to Rick. He has ability andexperience and should get the job on merit.'

However, as events now demonstrate, thatwas not the consensus view. One respectedcity analyst stated that there was something`Clinton-esque' about the denial by Oates ofhaving any part in the press coverage of thesuccession wrangle. He added:

If he is not involved, then his friends are.This sort of speculation is extremely dama-ging for a company and Oates of all peopleknows that.

It is like some Jacobean tragedy with Rickattempting to push out Oates and putSalsbury on the throne, and Oates, the oldpretender, attempting to mount a putsch. Inthe end, I think that they will all fall on theirswords and there won't be a dry eye in thehouse. But in the meantime, this charade is

detracting them from the fact that M&S is introubleÐand that is a proper tragedy.

The above represents only a fraction of thedramatic, colourful and acrimonious commentthat was extensively reported throughout allaspects of the British and European media. Oneof the most bitter and publicly fought board-room battles is ®nally at an end, but at whatcost to an organization regarded as THE modelretailer not just in Britain but internationally?The M&S brand is clearly regarded by analysts,investors and fund managers as THE barometerof the retail sector, and while competitors mayprivately enjoy the company's discomfort, theyare also shocked to see the market leader falterand lose its way. Richard Hyman, the Chairman

of Verdict Research summarized the positionendorsed by many: `It is incredible to think thatthe board of M&S could behave in such amanner. I think that all this business has beenvery damaging to the reputation of the com-pany.'

Carol Kennedy in a special theme edition ofLong Range Planning (1998) observed thatmany corporate change and succession pro-grammes fail because top management ignoresthe inconvenient truth that change is usuallyseen as threatening to the individuals con-cerned. Saving the company, or correcting itsproblems may not be a powerful enoughincentive when set against disruptions topersonal routines and agendas. Clearly thisis myopic, immature and unacceptablebehaviour and must be neither tolerated norcondoned. The considered judgement of manyanalysts and industry watchers is that the boardof M&S were fortunate to escape with thedamage caused (which was not inconsider-able)Ðthings could have been much worse.(See for example The Sunday Times report,1999a, `Revolting investors' in which theboards of underperforming companies are

Competitors are shocked tosee the market leader falter



dealt with by Prudential, Phillips & Drew andHermes Fund Managements. This new breed ofshareholder activist has been the scourge ofvalue-destroying companies and has beendubbed `The Awkward Squad'.)

Commenting on its report `What price repu-tation?' published in November 1997, thejournal Management Today reported:

The days when companies could do as theypleased, ¯y in the face of public opinion,turn a deaf ear to the cries of staff, routinelygive `no comment' to the press and speak tothe City only via their pro®t margins arelong gone . . . in the 1990s corporate reputa-tion has become more important and morevulnerable than ever before.

Being a good corporate citizen with a policyembracing good governance practices is ra-pidly becoming a matter of survival rather thanchoice, or at the least, an opportunity to stealcompetitive advantage over less sensitive com-petitors. M&S is not alone in experiencing self-in¯icted damage to its image and reputation.There is a long list of prominent organizationsthat have ignored stakeholder concerns orbadly managed communications across stake-holder groups including British Airways,Disney, Shell and Midland Bank (see forexample Beaver and Jennings, 1996). All thesecompanies will doubtless, over time, recoverany cash losses involved. But they may neverfully regain aspects of their general repu-tationÐand this could prove the greater loss.

These organizations join a growing list ofcompanies now facing the reality that each oftheir audiences will get to know what is beingsaid or done and will no longer simply toleratepoor governance, indifferent performance,insensitive management or inconsistentbehaviour patterns. Kay (1993) wrote:

One of the distinctive capabilities of com-petitive advantage that companies possessis reputation. It is the most importantcommercial mechanism for conveying infor-mation to consumers and other interestgroups . . . Reputations are dif®cult andcostly to establish.

Here perhaps is the nub of the matter: the needto haveÐand deserveÐa corporate reputationthat can act as a buffer when things go wrong.It is the spectre of a damaged reputationÐofhaving to make costly reversals in policies orpractices as a result of stakeholder pressure, orworse as a consequence of a self-in¯ictedwound (of the type under discussion here) thatoverhangs the urgency with which integratedstakeholder management and pro-active gov-ernance procedures now need to be treated.

Epilogue

At the time of writing (March 1999), PeterSalsbury announced that he will be meetingshareholders who will doubtless want toknow what his strategy and approach will befor steering the retail giant away from therocks. He has begun by courting the city, anarea where Greenbury with his more comba-tive style had dif®culties. Greenbury was an-gered by what he perceived as the city's shorttermism and its inability to understand hisbusiness. Nor was he afraid to make hisfeelings known. Angry letters, dubbed `Rick-ograms', were despatched in response to themildest criticism. Salsbury's more open andconciliatory attitude will be a welcome changeat this dif®cult time. He has been at pains toinform the city what is going on at thecompany and that he is undertaking a strategicand operational review of the organization`from root to branch'. In a statement to share-holders, Salsbury said.

We have put the senior management teamin place. They have the responsibility ofsorting out what they need, including helpfrom outside. We have been top-heavy inthe boardroom and we have more hierarchythan we need. The team is a third smallernow than it was and we have set aboutreforming the board. I did not do thisreview (the management cutting referredto at the beginning of the article) thinkingthat I would have to go back and do it again.


332 Graham Beaver

Staff at the Baker Street headquarters fearthat Salsbury has only just started wielding theaxe and feelings are running high. One seniorof®cial stated to The Sunday Times (1999b)that.

Anywhere between 200 and 600 peoplecould be made redundant in the next threeto six months depending on which rumouryou believe. But what we want to know iswhether the people accountable for M&S'sdownfall are going to be at the top of theredundancy list. Greenbury, Salsbury andthe main board must all be held accounta-ble. Many staff cannot understand whyGreenbury continues to be employed, espe-cially when he appears to be in denial of histotal responsibility for the debacle. Don'tforget that Greenbury will collect at least£400,000 for doing a three day week andgoing part time!

Salsbury is seen as the knight in shiningarmour but he has only worked at Marksand Spencer and if he continues to besurrounded by M&S clones, his task may betoo great. Do remember that Salsbury wasthe man in charge of clothing when thatdepartment went off the cliff.

Further changes in the management struc-ture are expected however, with the likely andunprecedented decision to appoint a chairmanfrom outside the company. This option is beingexamined by the company's non-executivedirectors. This may not look as rule-breakingor surprising as it ®rst appears, for there is aconcern that the `old-guard' has simply re-placed the `old-guard' when many people hadhoped that new blood and fresh ideas would bebrought in. This concern may be somewhatpremature, as Salsbury has made his `mark'early after being written off as Greenbury'sclone. In the ®nal analysis, the M&S affair is stilla debacle and the chapter has to be closedbefore recovery plans can be implemented.

The following ®nal observations, ®rst fromGeorge Davies of ASDA, and then from RichardHyman of Verdict Research are hard not toagree with.

At the end of the day, they hit a rocky patchand the right people have got to comethrough. Yes they have a challenge on theirhands, but I am sure that ultimately, theywill rise to itÐand after all what would thetraditional high street be without M&S?

You really do have to take a viewthat spans more than a few months, andprobably, more than a few years. M&S isgoing to come back and it will come backvery strongly. I do not think that there is anydoubt about that at all. I think that this hasbeen such a big shock.

Even though M&S has lost market share andseen the erosion to its competitive advantageand market position, there is little danger that itwill disappear from the high street. Thedamage to its reputation though is muchmore serious. The new management teamwould do well to appreciate and value thenecessity of effective stakeholder managementand good governance practices as key impera-tives for the future.

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CCC 1086±1718/99/060325±10$17.50 Strategic Change, Sept±Oct 1999Copyright # 1999 John Wiley & Sons, Ltd.

334 Graham Beaver

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