Abstract
The hardest part for a modern business is to create a brand which is known, trusted and admired by the nation. It is a process which can take decades to get right. However, we have to keep in mind that the brand image can be destroyed in a matter of days.
Currently, the company Marks & Spencer is one of the most well known retailers in the UK, with around 21 million people visiting its stores each week. The group developed its business on several segments like clothing and food. In the 2000s, its strategy was not well implemented, and customer's needs were misunderstood. These aspects caused a decline of the brand.
In this case study, we will initially examine the issues faced by M&S in 2004. In the second section, we will present the different advantages of the recovery plan. To conclude, we will evoke the new strategy assessment and the new directives for 2012.
In 2004, the M&S brand slowly began to go downhill. Its customer relationships and sales regressed. Why did it suddenly all start to go wrong? According to the document, this decline is partly due to an uncontrolled diversification strategy; "M&S was targeting too many segments and failing to understand the customer needs". Furthermore, in accordance to a BBC article, the brand was producing poor quality clothing, and credit cards were sometimes not allowed during payment.
Moreover, a major event in the company was the entry of Stuart Rose in May 2004 as the new CEO. He came to turn around the flagging fortunes of the company. The billionaire Philip Green, who worked in Arcadia Group, offered to purchase the company. Regarding these difficulties, M&S began negotiations with its suppliers with the aim of reducing its annual 149 million euro expenses.
It was one of strategies proposed by Stuart Rose. A lot of changes occurred with the departure of some managers (director of the clothing and the furnishing, the marketing director). In addition, M&S saw its image damaged even more because the president was accused of possible insider trading by the authority of financial services.
