Strategy - Essay Example It has 760 stores in UK and 30 countries around the world. (Annual Report) M&S profits peaked in 1998 when it crossed the Â£ 1 billion mark that year. It was the highest achieved by a UK retail chain. From then until 2002 it was downhill. In 2004 a new CEO Rose took over the reins and M&S slowly but surely got back to making higher profits every year since, although they are still far from the billion pounds they made in 1998. (see Appendix 1) Several major factors affected profits, the barometer of public support and financial performance. Rivals had switched to source their products from abroad at cheaper prices while M&S continued with the costly UK suppliers. As a result margins came under pressure, sales became stagnant and profits plummeted. From a high of a billion pounds in 1998, the profits fell to a low of 145 million in 2001. M&S were forced to curtail their dependence on UK suppliers and resort to other means for sustenance. (see Appendix 1) The second factor was the company policy not to accept credit cards. This had become a universal phenomenon and denial was luring younger and more mobile customers away to other rival outlets that offered this facility. The third factor was that M&S had abandoned its high street image and had gone for low end products like rivals were doing and it suffered an image loss. It was earlier known for quality of its products and it was no longer a leader in that segment. This forced a serious rethinking in the boardroom and let to a total revamp in both control and strategy of the company. A new post of Chairman as well as a new one for a CEO, as against a combined post, were created and have since seen the companyâ€™s fortune turn around. M&S, chastened by the serious erosion in customer loyalty and profits decided to revert to its roots. In the first stage they went back to exploit their core competencies. M&S started off with introduction of a new range of classical clothing for women and it was reported
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