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n for the decline of M&S, due to mismanagement by the CEO. Most of the senior and middle management reported that they are disappointed with the lack of progress, due to leadership problems of Holmes such as being to nice, taking too long to make decisions and lacking relevant in terms of experience.

Another cause of decline of M&S is the complicated structure where in beyond the main board was an operating committee with 19 members. The said aspect is due to the fact that CEO was not that familiar with the core products of the company.

Financial Control

It is also important to include that poor financial control is a common cause of falling profitability due to poor budgetary control, inadequate costing system as well as the inability to monitor as well as control cash (1996).

In the cause of M&S, Holmes believes that throwing more money at the problem can be the best way to boost profits. This can be seen in the massive actions of the company which involves acceleration of transformation of the business by firing employees, and development of stores and other line of products ( 2004).

Marketing Efforts

Lack of trust from the customers is considered as one of the causes as well as symptoms of decline. This has been one of the primary problems of the company. Customers had complained that the trust had been damaged, due to the fact that the company was already offering low-quality products. In addition o that, the company had a problem regarding their innovation process, which is considered as very important aspect in any company.

Production and Operations

The fallen quality of the product is one of the primary aspects that focus on the production and operations aspects of the company. In M&S, it was due to poor labor relations of the upper management.

Environmental Factors

The changing demands, tastes preferences and needs of the customers are the primary factors that can affect any company. However, in the case of M&S, the company did not focus on strategies that will help them to meet the said change. The said aspect is important because it can greatly affect the perception of the customers in any brand. In addition to that, more and more customers are looking for products in lower price but in good quality. Thus, in order to meet the said expectations, the company decided to implement different strategies that will help them to lower their price, like their competitors, however, the said aspect affected the quality of their products that later on affected the demand of the customers.

As a result of the said causes, the company encountered falling profitability, falling dividends, increased debt, decrease liquidity and falling sales (1996). This can be observed on the fact that despite of more than 10 million customers every week, the company have not yet recaptured the glory days between 1997 and 1998 when it had made over ￡1 billion pretax profits. In 2004, M&S announced a decreased in sales of 3.6%, compare last year (2004).

Recovery Strategies

The management was changed in 2004, as part of the entire organizational change when Robert Rose took place. Rose focuses on the five core values of new M&S: quality, value, service, innovation and trust. This is due to the fact that Rose believe that Holmes' management focu