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The battle for the brand, and the brand's battle for customers. The market is always interesting in the elegance of how it operates. Take the case of the 120-year-old British retailer, Marks & Spencer. This marketer of mainly clothing products has been doing badly over the 1990s, and particularly in recent years. Some have even dismissed it as a terminal case. But it is also the focus of one of England's most interesting ever takeover tussles. It is a publicly listed company, with shares owned by several people. Since its performance has been poor, the share price has been languishing... ... and, as happens under the logic of markets, the cheapness of shares has made it vulnerable to takeover by new group of people who could force a change in management (perhaps with better ideas). The takeover tycoon here is Philip Green, who shook London in the summer of 2004 by trying to scoop up the company at 4 pounds a share (several pence above the market price). The company's CEO, Stuart Rose, has had to respond with all sorts of measures to keep shareholders from jumping at the offer---including a share buyback. Stuart's real challenge, of course, is to ensure that the share price goes back to 4 pounds, and that is precisely what he has pledged his effort towards. Sundry shareholders, and of course Green himself, are sitting back to watch what Rose will do. If he manages to get customers flocking back to the brand----and Green evidently thinks the brand in itself remains powerful enough to deliver profits way into the future---all will be well, and everybody can go back to whatever they were doing. It's all rather English, you may have noticed. There have been rather few angry outbursts. There is no evidence, or even hints, of sleaziness in the way the battle is being played out. And shareholders seem to be playing the role of a gentlemanly audience---watching gamely which of the two leaders can achieve the strike price (4 pounds) to their satisfaction. The incumbent, Rose, gets the first chance... with Green waiting his turn, issuing a statement now and then to pressure the company. Will there be an exchange of strategic thoughts? Perhaps. It would make the game all the more interesting-especially if the share price starts tracking Green's criticism and how Rose is responding to it. Pricing, for example, is an issue. M&S clothes are simply not competitive enough, given that the prestige appeal seems to have worn out. This is so across the world, perhaps more so in markets such as India where the brand's reputation for high-quality brassieres remains strong, but the shops still don't get enough customers. Price snipping has been tried, but is it making a difference? The bigger challenge, perhaps, is the actual appeal of the brand---as a brand. The confusion here needs to be dealt with, before an effective campaign can really be mounted that doesn't just retain old loyalists but wins new converts as well. The brand, it must be admitted, operates under a rather eclectic set of constraints, and it would take quite a stretch of the mind to resolve it all. To begin with, the imagery needs serious attention. Maybe Rose and Green can start by telling shareholders---with all the artistic subtlety at their disposal---what all they think is not on, rather than search for agreement on what is.
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