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Case II: Marks and Spencer, Ltd. The venerable British retailer Marks & Spencer suffered a series of setbacks in the late 1990s. The company's performance, which had been solid for decades, quickly deteriorated, forcing the rapid turnover of chief executives and many restructurings. Perhaps the largest change the retailer made was the abandonment of its global expansion plans, withdrawing from continental Europe and trying to sell off assets in the United States, including the well-known clothiers Brooks Brothers (Burgleman and Meza 2001) “Globalization and M&S”Marks and Spencer was once the most admired of British retailers. The profitability of the British retail sector in the 1980s and 1990s was the envy of the world. There were many explanations some of which are none too flattering such as collusion over prices and artificial barriers to new store development by competitors, but in general the view was that the British had managed the phenomenon of own branding better than their international rivals. Retailers selling products under their own names tend to position them on price and as bargains. (Chun et al., 2003). Food was sold but the offer was somewhat different from that today, including for example substantial sales of broken Kit Kat biscuits, a leading brand of chocolate wafer from confectionery manufacturer Rowntree. Simon Marks in particular seemed unconvinced that food held much of a future for Marks and Spencer nevertheless a food development department had been created. What has become known as a human relations policy at Marks and Spencer dates to the 1930s. A personnel department began in 1933 and a welfare department in 1934 whose role extended to the well-being of previous employees (Drucker 2003). Employees today enjoy subsidized meals, services such as hairdressing and chiropody, discount schemes, and a profit sharing scheme. Membership of trade unions among Marks and Spencer employees was and is very low. The company was a household name, a British institution, yet Marks and Spencer had rarely advertised in its century and more of trading, although it was highly involved in the community, committing £4 million to good works. Its human relations policies and career prospects attracted and retained good quality staff. Marks and Spencer's positive attitude to staff was reflected in their staff's positive attitude to customers. Marks and Spencer had used the fact that their products were manufactured within the UK as part of its marketing (Foss 1997). Twelve million people shopped there every week for the simple reason they trusted them. That was the truth, even if they did not always buy. Experts knew from the figures that only about 8 or 9 million people would make a purchase. But they came every week and back the following week because of a tremendous reputation which had been built up over many, many years (Engwall & Morgan 1999).
The label on a garment can change people's perceptions of it. It is fashionable at the moment to