Houllier said: "I think the slump was due to several factors. There was a loss of form in several key players, some of whom also suffered as a result of the World Cup. We didn't lose the Champions League place at Chelsea, we lost it during our bad slump.
"There were a few games when we had chances to finish teams off and didn't, which gave the opposition more confidence.
"The home record was not good enough. Before the Chelsea game the statistics showed that only Manchester United had more shots than we did so we do attack, we are not negative, but unfortunately we lacked the clinical finish at times and we were not as strong or solid at the back as we have been in recent seasons.
"We did attack but two things went wrong. The finishing wasn't in proportion to the amount of chances we created, Jurgen Macho had two great games all season and they were both against us, and around the box we weren't effective enough. That's why we need someone who can bring that spark.
"We scored practically as many goals as the season before but conceded 11 more. That was one of our fortes the year before.
"We missed Didi Hamann for a number of months and Steven Gerrard when he had his bad period and a costly suspension. Plus we were without Stephane Henchoz for almost half the season.
"The problems give us an explanation, not an excuse, and we want to work on them. We know we have under-achieved but I still feel we need a bit more time.
"This squad has been rebuilt in my time here, we have won six trophies and reached the Champions League twice. That has been excellent. But this season some players prospered and some didn't. We must keep the nucleus and do better."