2 major high street chains announced that they would be closing stores. Marks and Spencer (M&S) has announced it will be closing 6 stores and department store Debenhams will also be closing 10. This comes just months after M&S announced it would be shedding hundreds of jobs at it’s head office.
Will such a shift towards online shopping it really does make sense for businesses to be investing so much into traditional retail stores or should all retailers be developing app’s and e-tail technology’s?
These 2 businesses provide fascinating case studies for all business students to assess how the high street and how we shop is changing. According to The Guardian, Marks and Spencer will make 380 people redundant, however they have pledged to try and redeploy these employees to nearby stores. This comes as Debenhams plans to close not only 10 stores but also 11 warehouses, making hundreds of people unemployed.
The M&S CEO Steve Rowe claims that these changes are necessary as customers shopping habits are changing. People are more likely to browse online and pick up in store, or shop entirely online. Therefore there just isn’t the need for the amount of floor space that M&S has dedicated to clothing. However, the company do plan to open 34 stores that are dedicated just to food, again as social and shopping trends change they are aware that people are likely to pick up small amounts of food from somewhere like M&S rather than doing one huge big weekly shop.
Debenhams’s announced last week a 6.4% drop in pre- tax profits and quickly on the back of this now plan to close 10 stores and 11 warehouses. CEO Sergio Bucher who took over at the company in October 2016, says that customers priorities are no longer focused on clothes shopping. They are now looking at other ways to try to engage customers with their products creating a great mobile platform as well as changing the way that they offer click and collect.
Below I have suggested some ways in which I think that this could be used as a revision case study.
- A SWOT analysis would be a good way to start and to get students thinking about an overview of the 2 businesses – maybe putting students in pairs to focus on a business each they can they teach each other about the business they haven’t looked at. This would also enable students to reflect on many of the topics they have covered over the past 2 years, PEST factors, customers service, technology etc.
- Porters generic strategies would be a great example of how to ask students to analyse what could happen when businesses become ‘stuck in the middle’ and don’t utilise one of the suggested differentiation or low cost approaches to be a successful business.
- Ansoffs matrix is another good tool to get students to look at the strategies that they are currently employing and the risk associated with each – whether they are likely to work. This should get students to start to think about judgement.
- Force Field analysis – Lewin – this is another fantastic concept to ask students to think about the forces that have actually brought about the changes – so the CEO’s but what else, and who might resist the change. You could also extend this further by asking students to consider HOW this maybe managed in the workplace.
- Product life cycle/ Market Mapping/ Boston Matrix are all other ways in which you can get students to think about why this has happened.
Hopefully by asking students to do this- it will not only get them to reconsider some key theory but also hopefully see how so many concepts can be applied to the same context, all be in different ways.
Donna-Marie Jestin
Teacher of Business and Principal examiner for a leading UK exam board.
