Marks and SpencerWhat were the underlying problems at M & S in the early 2000s?AnswerMark and Spencer was highly successful in terms of profit and market share until the 1990s. M & S applied some critical strategies which included simple pricing structure, offering customers high quality, attractive merchandise, quality control, friendly and helpful service.
M & S problems peaked in 1998 when it halted its European expansion program. This means that for M&S loss of market share to top-end competitors such as Oasis and at the ‘bottom end with competition from discount stores and supermarkets.
The following were the underlying problems at M & s in the early 2000sReduction in market which lead to decrease in profitsCustomers were not satisfied with product and serviceCompetition with/ from discount storesOverpriced clothing even during peak periods ( e.g. Christmas)Poor/ negative advertisement from the analystSlow pace/ not moving at the same pace as the changing market. (Taste and preferences change with time- not keeping up with the change).Failure to identify / address the key problems- strategies put in place was temporary because they did not solve the problems in long term.Lost customers confidence (customers were bored of the same styles).Board of directors not believing in the recruitment of managers from outside the company (fresh ideas from outside the company were not brought into M & S as there promoted internally).
Decision marking very slow (CEO had to consult different committees before coming up with decisions).Sticking to old ways of doing thingsCEOs who were not that knowledgeable on the productsDiversification for example inclusion of home ware and food stores also brought its share of problems.Too much expectation from the different CEOs (some not leaving space for failure).Changes made were not holistically assessed on how they would affect the running of the company.Market research was not a priority- Understanding customer needs will help you define new market opportunities and drive innovation and revenue growth in every aspect of your organization. Considering the customers desires will pull product development into better direction and amplify success. Customer
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