5Z7V0006 Digital Leadership Transformation

Module Code And Title : 5Z7V0006 Digital Leadership Transformation

Part 1: Individual report: Introduction of AI-enabled digital marketing for M&S

Introduction

The revolution of Industry 4.0 has initiated the utilization of technology in the commercial sector, which has taken a finest shape in the twenty-first century. However, it has been identified that Marks and Spencer (M&S), a leading retail brands of UK has not implemented digital technology in the business which has created major hindrance to its organisational growth. The purpose of this report is to analyse and evaluate the situation of the company to introduce AI-enabled digital marketing for M&S.

Current Situation Analysis

In the introductory section, it has already been mentioned that this report is specifically focused over the idea of digital transformation for the retail company Marks and Spencer (M&S) which is currently doing its business majorly in the UK market. In recent times, the operating business market of UK has undergone multiple changes among which has both direct and indirect impact over the business of M&S. As per the idea of Kang et al. (2020), implementation of any change should always consider industrials, market and company analysis. In this situation analysis both the three factors have been included which has been done with the support of PESTLE, SWOT and Porter’s five force model.

External situation analysis-PESTLE

Political

UK is politically stable but the issue of Brexit has created major disruption for the business in the UK. As per the idea of Pettifor (2017) British economy has taken exit from EU and this has restricted free trade between the UK and nations associated with the EU group. This no-deal Brexit has created disruption in the free-trade at the cross border level for UK. Bunn (2019) reported that in the high street retail market, the major negative impact has been imparted over the high street retail market as mentioned sector has faced a loss of 32.2, million pounds after Brexit.

Economic

UK is considered as one of the strongest economies at the global level but the issue of Covid-219 and Brexit has cumulatively created a negative impact over the economic growth of the market. Chan and Plummer (2020) reported that the economy of the UK has shrunk up to 20.4% leading to the creation of recession in the market. As per the idea of Kopp and Siegenthaler (2021) the issue of recession in the market invokes the crisis of unemployment. The same factor has been noticed for UK as it has been reported that about 220,000 individuals have lost jobs due to the economic crisis in UK for 2020 (BBC, 2020). Additionally, King (2020) reported that 1778 organisations of UK had specifically targeted to cut about 139,000 employments. This economic condition is not favourable for getting proper business growth in UK.

Social

The trend of ecommerce has deeply integrated with the UK market and especially in the pandemic and post pandemic period of Covid-19. It has officially been evaluated that the total revenue generated from ecommerce for UK is about 693 billion pounds and 87% of the householders of the country have got involved with online purchasing (Statista, 2022). Cameron (2022) reports that the UK is at the leading position regarding the penetration of e-commerce and 29.1 % of the entire retail sale is conducted via ecommerce in UK.

Technological

The business sector of the UK has shifted towards the acceptance of new age technologies that includes AI automation, robotics, machine learning and more. It has been reported that nine out of the 10 purchasers for the UK are purchasing and browsing products in the online platform and thus use the main factor for which AI has been implemented in online branding (Consultancy, 2022). With the help of AI enabled advertisement positioning, the customers are able to get personalised advertisements in the online platform and the implementation of Automated PPC has been done by the major retail brands for UK (Consultancy, 2022).

Legal

The legal aspect of UK is highly supportive in conducting fair business over the market. The implementation of Companies Act 2006 has helped in the promotion of fair trade with the acceptance of corporate governance (legislation.gov 2022). Additionally, in 2018, FRC or Financial Reporting Council have implemented new corporate governance code (FRC, 2018). This has also helped in the promotion of fair trade practice and adoption of corporate governance for the UK market.

Environmental

The sustainability is majorly focused for the UK business sector. The acceptance of the UN SDG goals and implementation of the sustainable strategies in the management of the commercial operation has been noticed in UK. This factor has supported the upgradation of the entire commercial sector of UK regarding sustainability.

Organisation analysis-SWOT

Strength

M&S is one of the leading retail brands of the UK which is currently doing its business with 70,000 employees (Marks and Spencer, 2021). Hence, this is one of the major strengths of the organisation. As per the idea of Ahn and Back (2018), availability of the effective support of the customers is one of the major factors which help in the brand success. M&S supports 30 millions of customers per year (Marks and Spencer, 2021). This is another strength of the organisation.

 

 

 

 

Weakness

M&S have not implemented the strategy of online placement and digital marketing. Wood and Butler (2018) had mentioned that competitive brands like Asos, ME+EM have already implemented the strategy of online marketing and sales.

Opportunity

M&S has created a partnership with Ocado for online placement and sales of its food brands (Davey, 2019). Thus has helped to make the food brands profitable for the company.

 

Threat

The lack of digitalisation has invoked a loss of 201 million pounds long with closure of 30 physical stores and a job cut of 7000 employees (Chapman, 2021).

Table 1: SWOT analysis

Industry analyses

PORTERS

Porter five forces that were introduced by Michael Porter helps in analysing attractiveness capacity of an industry and its potential for generation of profits. As stated by Birru et al. (2022), this theory helps in keeping a watch on activities of competitors so that necessary actions be taken to be a leader within markets. The five forces present within Porter’s theory are as follows:

Threat of New Entrants:  Threat of new entrants can be defined as new competitors entering within industry and it falls important for an organisation to have a presence of well-defined brand image present within markets. As opined by Le et al. (2020), it can be stated that the threat of new entrants in the UK fashion retail sector is moderate because of low business initiation. Moreover, luxury brands such as Marks and Spencer’s have to invest much on research and development due to which there is a need for market knowledge. Hence it is not easy for new entrants to enter the markets.

Bargaining Power of Suppliers:  There is a presence of limited numbers of suppliers who can supply raw materials to luxury brands like Marks and Spencer’s as a result of which bargaining power of suppliers is quite high. Suppliers present within the UK are quite powerful and make use of negotiating powers to extract higher prices from its consumers. This in turn reduces profit generation capacities of luxury brands like Marks and Spencer’s and is forced to increase their prices of their goods.

Bargaining Power of Buyers:  Buyers tend to buy a lot from markets by offering prices that are low and that best suit their needs. With reduced earnings of people with onset of Covid 19 they prefer to purchase luxurious goods at reduced rates and it becomes important for brands like Marks and Spencer’s to offer products at reduced rates.  It can thus be easily said that people present within the UK have huge bargaining power that tends to influence pricing policies of luxurious brands like Marks and Spencer’s.

Threat from Substitute Products:  It is highly difficult to copy designs and get similar kinds of designs that are offered by Marks and Spencer’s within its products. It constantly introduces innovations within its products that helps in ensuring that there are no substitute products available within markets. It can be said that Marks and Spencer’s faces low forms of competition as there are no substitutes that are available for its products.

Rivalry from Existing Players:  Marks and Spencer’s have successfully listed down all of its products within online platforms that is helping it to compete with its competitors. There are few luxury brands available within markets as a result of which rivalry from existing players is minimal. Marks and Spencer’s products that are offered to customers are also highly unique in nature that again acts as a positive factor that tends to reduce presence of competition within markets. Pricing strategy that is followed by Marks and Spencer’s is another strong factor that is helping Marks and Spencer’s to reduce presence of rivalry within markets.

Critical discussion for strategic transformation

From the SWOT analysis it has been identified that the brands of M&S are not performing properly in the high street market leading to the major issue in the management of the organisation ethics and business performance. This can be managed with the digital transformation of the entire marketing approach by implementing AI. As per the idea of Kingsnorth (2019) digital marketing includes Omni channel marketing, social media marketing along with the promotion of ecommerce. Additionally, it has been reported that implementation of AI helps the retailers to achieve success in the ecommerce platforms as AI-empowered NGL (natural language generation) helps in the creation of 100,000 personalised promotional content and this is the main factor for which 3.98 billion pounds have been invested by the retailers totally for the UK market in AI-enabled digital transformation of their marketing (Consultancy, 2022).

In the upper section PESTLE analysis has been done, and it has been noticed that in the entire business market of UK, ecommerce or online sales have highly been accepted However, with respect to test very little challenges has been accepted by M&S in its business.

5Z7V0006 Digital Leadership Transformation 1Figure 1: Online retail sales for UK (Source: Statista, 2021)

In the above graph, the trend of online retail sales for the UK has been represented from which it can be interpreted that the online retail sale is exponentially growing for the UK market. The sales figure of retail products in the online platform has moved from 67.71 billion pounds to 99.31 billion pounds within 2020 (Statista, 2021). From this angle, it can be considered as online sales or ecommerce is the major trend which has got deeply integrated with the retail sector of UK. M&S is also doing its business in the retail sector of UK. From this angle, it can be mentioned that the organisation has to accept and enhance its retail sales capability for which an extensive digital transformation is required. As per the idea of Petry (2018), development of digital leadership is highly necessary for the successful digital transformation at the organisational level. Additionally de Araujo et al. (2021), stated that the implementation of digital leadership helps in the development of technological capability regarding the digital technology. The awareness of the employees and other stakeholders towards digital technology and willingness to accept the same is majorly enhanced with the implementation of digital leadership. M&S have implemented digital leadership previously to invoice digitalisation to its business. As per the official annual report, in the current time, some of the brands of M&S are available on 100 websites around the globe including UK (Marks and Spencer, 2021). However it has been noticed that digital leadership has not been implemented to the adequate level which can effectively invoke digital transformation to the entire business of M&S and not integrate AI with the digitised marketing approach of the company. This is one of the major issues which needs to be addressed in the context of strategic transformation.

M&S has previously implemented the strategy of partnership, in the enhancement of digital capability of the organisation and to promote online sales of its product in the market. It has officially been reported that M&S and Ocado have initiated a partnership venture in which the retail food products created by M&S have been placed in the online platform with the support of Ocado and this initiative has contributed a profit of 110.4 million dollars (Faithfull, 2021). It has further been reported that the share of the partnership has been identified as 50:50 between Ocado and M&S which has helped to create a dedicated customer base of 12 million individuals in the online platform (Ocado, 2021). From this angle it can be analysed that the strategy of partnership is one of the major factors which has helped in the digital transformation of M&S initially. Hence, the organisation should imply the same strategy for the digital transformation of its entire marketing approach for all of its brands, as M&S have the capability to move on with a successful partnership business model with the organisation.

Conclusion

At the end of the report, it can be concluded that the financial situation along with the technological capability of M&S is not highly supportive to initiate digital marketing with the integration of AI technology.

Recommendation

Partnership with IT firms

In the upper section of the report, it has already been mentioned that M&S have effectively created sustainable partnership with Ocado and thus has helped in the digitalisation of the entire marketing activity of its food brands. From this angle, it can be recommended that the introduction of AI-enabled fully digital marketing activity can be achieved by M&S by creating partnership with the IT forms. The IT firms which cater AI technology at B2B level can be selected by M&S and creation of partnership with the same can be done. As per the idea of Somjai (2017), outsourcing of the business process is one of the major trends which minimised complication in the business management. In this case, the princess of digital transformation can be outsourced with the support of the IT firm. As for example, Deloitte, has been doing their business by focusing over the providence of technical support to the other companies. Hence, from this angle, it can be recommended that M&S should move on by partnering with Deloitte. As per the official report, Delotte is associated with the standardisation and optimisation of automation software (Deloitte, 2022). Additionally, providence of service regarding cyber AI and catering of AI-enabled defence for the commercial information is also done by Deloitte. Hence, the creation of AI-enabled digital transformation of the entire marketing approach of M&S effectively.

Implementation of digital leadership

Apart from the creation of effective partnership with IT-farms, change in the leadership approach of the organisation is essentially needed. Hence, it can be recommended that implementation of digital leadership should essentially be done for M&S. As per the opinion of Petry (2018), digital leadership represents the strategic and effective utilisation of the digital assets and capability of an organisation for obtaining business objectives. The major business objectives of M&S of the current time is to enhance its profitability for which digital transformation of the entire marketing apache of M&S is essentially needed. Hence, with the implementation of digital leadership, proper analysis of the current digital assets of the organisation and development of the awareness for the utilisation of digital assets should be done. This should promote the successful digital transformation of the entire marketing approach and integration of AI with the same.

 

Part 2: Personal reflection

The development of leadership skill is essentially important for each and every individual and I also prefers the same as leadership skill helps a person to get success in the professional career. I am a student of business studies and I have to be prepared to step into the professional field in the near future. Hence, leadership should be one of the most essential criteria. Rubens et al. (2018) researched and mentioned that leadership skill is one of the primary global professional skills essentially needed among the employees for a corporate organisation. I have my objective to service managerial posts in the future in my upcoming professional career. Hence, I always into the practice of reflective and reflexive thinking which helps me to structurally develop my strategies for personal leadership development. This section is all about the reflective analysis of the incidents that I have experienced in the learning process as a students and in my internship. I should take the support of Gibbs reflective model to analyse my experiences critically.

Gibb’s model

Description

I have been associated with an internship project with a renowned retail company of UK. I have been in the marketing team as an intern. In major cases, I found crisis in communicating and expressing my viewpoints to others with confidence. Thus factor has majorly hindered me to be more creative and to express my creative thoughts regarding marketing projects in well-defined format to the others. As per the idea of Fortunato et al. (2017), communication skill is considered as essential skills as it helps to conduct information in the workplace. I have issues in communication and I especially noticed my crisis in the context of verbal communication and in public speaking as well.

In the learning process, I have faced ethical issues. Once, I and my peers have been associated with a group assignment and at that time our module leader (teacher) was not available. I have framed a decision by myself but I count not expressed it to my peers as my idea was not approved by our model leader. From this angle, I can analyse that I have faced a severe ethical dilemma at that time which has negatively influenced my decision making skill.

Feelings

In the previous section, I have expressed my experience that I have faced as an intern and a student. I have major drawbacks regarding decision making and communication skills. As per the idea of Rozalena et al. (2020), effective communication skill is essentially needed to serve the managerial post in the professional field. From this angle, it can be analysed that communication skill is deeply tagged with the leadership capability of an individual. I am lacking in that case. However, I can confidently communicate in the written format. We had a scope of communication with our managers in Google hangout during our internship. I comfortably communicated with my managers and my colleagues in the written format. Additionally, I was able to express my viewpoint in that written format. From this angle, I can specifically feel that I have issues in verbal communication, but not in written communication.

Evaluation

I have already unidentified that I have an issue in the communication skill, which is creating hinders in the development of my leadership capability. As per the idea of Fatehi and Choi (2019) with active communication, negotiation is done in the professional context. A leader has to have effective negotiation skills as Fateh and Choi (2019) mentioned that negotiation and communication helps in the maintenance of professional relationships. Due to the issue in my communication skill, I have poor negotiation skills as well and this is my evaluation regarding the drawback of my professional skill set.

Analysis

I have faced issue indecision making while doing the group project with my peers. I have felt that I need to be permitted by my module leader to make any decision. Management of critical situations and decision making is deeply associated with leadership skills. I have drawbacks in it and ethical issues have prevented me from making designs. From this angle I can analyse that I have to be wider in the situation analysis to prevent any ethical issue, but I also have to make quick decisions to manage crises for professional stability. This should help me to be an efficient leader in the workplace.

Conclusion

At the end of the analysis, I can conclude that a leadership skill is associated with multiple other skills factors which should be developed to be an influencing leader in the professional field. Initially I found that I have an issue in the communication. However, with reflective analysis I have identified that I am specifically lagging in verbal communication and public speaking but not in written communication. The issue in verbal communication is creating hindrance in the development of negotiation, skill. I have issues in the situation analysis and decision making. All the studied factors should be addressed in the personal leadership development plan.

Action plan

Skill Goal Current ability Strategy Time Frame Resource
Verbal communication I have the goal to develop my verbal communication skill in such a way that I can able to express my Ideas and my opinion structurally and factually to my colleague and team members. In the group conversation I always remains quiet and I do not able to express my ideas structurally in front of public. I have taken the strategy to get involved with a professional course of communication skill development. This should help me to develop my speaking power and my confidence to speak in front of people. 6 months Financial resources, technological resources link computers, internet connection, web-cams and more.
Decision making My goal is to be confident in decision making I majorly surfers from ethical dilemmas while making decisions. Thus hinders me from taking wise decision in perfect time. I have taken the stagy to do situation analysis by myself regularly and to do reflective analysis. This should help me to learn from the real evidence and to be more mindful and confinement in making effective decisions in proper time. Additionally I have the plan to do role plays with my peers in extracurricular period. This should help all of us to be more perfect in decision making. 8 months Stationary resources for documentation.
Table 2: Leadership development plan

References

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Appendix

Appendix 1

 

Porter Five Forces High/Low
Threat of New Entrants Low
Bargaining Power of Suppliers: High
Threat from Substitute Products Low
Rivalry from Existing Players Low

 

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