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Marks & Spenser Internationalization Essay

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Updated: Jul 23rd, 2019

The anticipation by Marks & Spenser to expand internationally beyond the UK has been an uneventful venture. It has been regarded as a graveyard venture for the organization (Burt, Mellahi, Jackson & Sparks 2002, p.191). Although the organization had ambitions to expand globally (Burt et al. 2002, p.214), its global strategy was not well planned hence the failure.

This according to Lassare (2008, p.33) the organization lacked a special component of global strategy which is global ambition. Globalization of M&S in the 1990s was a major arrived after it become satisfied that the home market was fully covered. Based on the M&S operations, the organization lacked almost the major attributes of global strategy suggested by Lassare (2008, p.33).

For instance, its global business strategy was poor as the organization bought assets in US at high prices with the hope that the market would expand (Burt et al. 2002, p. 214). Consequently, in 2001, the retail chain store withdrew and sold most of its major stores in foreign countries such as the U.S and Japan and franchised its Hong Kong based operations (Steve 2002).

Nonetheless, M & S has not been thwarted off by its failures as it is now seeking a way to refocus and expand its business operations internationally. This would minimize the pressure being experienced in the UK market (Davey 2008). The essay seeks to assess the current efforts by M&S to rebuild its international strategy based on its past internationalization record.

Locational disadvantage, entry mode, and adaptability are regarded as the major cultural causes of internationalization failures (Burt et al. 2002, p193). Although past failures are not regarded as much as the success stories of internationalization, they form a basis for an organization to retrace its footsteps. An organization like M & S would evaluate its past failure and regard it for its comeback.

Before the decline of Marks & Spencer, the retailer was among “the most successful British retailing companies” (Burt et al. 2002, p.200). However, the organization lacked a well formulated internalization strategy which led to duplication. Conversely, the current move by the organization to start up internationalization in Asia and Europe is well planned.

According to Tu (2008), M & S is prepared for the new venture as the company believes there is an increase in demand for its products in the China’s mainland. It can therefore be argued that M&S is adopting a fully pledged global strategy perspective which according to Mellahi et al. (2006, p.14) allows global strategic management.

Despite past failures by the organization, M & S has been on the verge of re-internationalization. It has been focusing on venturing into the emerging markets in Asia especially those of India and China (Marian 2011; Trotman 2011& Finch 2008). According to Tu (2008), Yan (2008) and Brangigan (2008) M&S has established a mega chain store in China which is probably the largest in Asia.

The organization believes that it will be in a position to attract different consumers and be successful like the Hong Kong based operations. Despite efforts to re-establish in China, the head of China’s based store left because of ground operation problems and the current financial problems (Tryhorn 2009).

In 2009, the organization was faced with supply chain problem (Rowley 2009) which was coincidentally experienced in the Canada’s retail venture in the 1990s. According to Burt et al. (2002, p.211), problems associated with supply chain were never addressed properly and so were the differences between the UK and the Canadian clothing requirements.

The same has been duplicated in the recent entry in China’s market. This is an indication that coordination is lacking which is emphasized under the global strategy theory (Mellahi et al. 2006, p.11). Lassare (2008, p.56) note that for a global strategy to be successful, it is required to have a global organization attribute which allows coordination of all its operations.

Although operations in China are catching up, M & S needs adjustments to prevent internal failures resulting from poor management. This should would ensure that the organization global organization (Lassare 2008, p36) where all activities are coordinated.

The organization has been planning for a joint venture in the Indian market (Roy 2008). According to Hall (2008) the joint venture will see M & S open more than 50 stores by 2015. This according to Lassare (2008, p.33) is part of global strategy framework where a nation chooses the nation to invest thus achieving global positioning.

Unlike in the past where the retailer acquired new brands (Burt et al. 2002, p.), the retailer is focusing of rebuilding its brands internationally (Roy 2008). The joint efforts are more likely to boost its synergy which is a major component of global strategy as noted by Lassare (2008, p.56) and Mellahi et al. (2006, p.12).

Other reports indicate that M & S is on the verge of approaching European retailers with the aim of buying out properties it sold during the 2001 crisis (Kollewe 2010). This would ensure that its internationalization process utilizes global business system which creates competence and competitive advantage (Lassare (2008, p.33). Its current internalization process has incorporated major attributes of the global strategy.

The development theory assumes that the predetermined existence and high performance of an organization on the international markets lies in its establishments (Burt et al. 2002, p. 196) which makes market entry preconditions vital. Currently, the organization is entering new markets like India with this in mind. Instead of focusing on new brands, the organization aims to expand its brand (Roy 2008, p.2).

This is a reflection of global strategy which according to Mellahi, Frynas and Finlay (2006, p.11) involves leveraging of synergies across different countries based on a single strategy. Although it is a difficult strategy, the organization will be able to carry out its competitive battles globally (Mellahi et al. 2006, p.12). The integrated approach may increase its competition as it internationalizes its operations.

The retailers’ management believes mistakes were made while venturing into the U.S markets and it is not ready to repeat the same mistake.

However, a clothing industry analyst observes that the organization maybe repeating the same mistakes of duplicating the UK marketing mix at the international market (Holmes, 2010). The analyst advises the organization to instead concentrate on building a brand that meets the demands of the new generation as the old generation of the 1990s is ageing.

Industrial organization perspective blames the failure of an organization on external problems which force organizations to exit (Burt et al.2002, p.197). As M & S resumes internalization, it is likely to repeat the same mistakes like operating with the same brands. For example, according to Roy (2008, p.2), the retailer plans to concentrate its M & S brands in the Indian market, and this was the reason why it failed in Canada.

According to Burt et al (2002, p.211) and Bianchi and Ostale (2005, p.145) the retailer replicated the UK’s model in the Canadian market. Because of the high competition, the brand was never taken seriously hence the failure. The poor response, lack of vision, and inability by the management to make appropriate adjustments led to the exit of the retailer from the Canadian market.

The market can be related to the U.S where synergy and operational direction were lacking leading to failure. Basically, the retail entry mode was based on a collective move whereby past experiences of the UK model were applied in the international markets.

However, the comeback by M & S is based on a global strategy which integrates competition strategies in different countries (Mellahi et al.2005). Based on Lassare (2008, p.33-34) global strategy analysis, an organization should be able to develop a competitive advantage in its global strategy.

The M&S comeback should not be based on the old brand since consumers tastes, demands and preferences have changed despite the fact that M & S brands are known worldwide. Brand duplication would lead to the same results that were experienced in Canada (Burt et al 2002, p.211).

Consumers need innovative products which it can be associated with hence the need to conduct an extensive study before entering in a new market. M & S needs to avoid the same mistake that has been experienced during the 2008 internationalization in the China’s market.

According to Rowley (2009, p.1) the management admitted having made a bad move as it did less shop-keeping on consumer sizes. Through shop keeping the retailer will avoid the same mistakes it has already made in the Chinese market.

M & S has always had the tendency to assume that its brand is well known thus adopting word of mouth advertising strategy instead of using modern methods of promotion and advertising (Alon 2000, p.1; Alon 2006, p.226). This component of a marketing mix is very important as it creates awareness and develops a strong brand name which M & S would be willing to have.

As suggested by Tu (2008, p.2), M & S ought to conduct promotions and effective advertising to win its international markets. It is also suggested that the company should take control of quality and brands selection with the aim of meeting the international market standards. Brand image captivates consumers hence the need for M & S to invest heavily on its marketing plan especially on its marketing mix.

As recommended by a retail analyst, M & S needs to sort out its infrastructure to avoid the chain supply related delay issues (Holmes 2009, p.2). Upgrading the supply chain would ensure that the products are availed to the consumers at the anticipated time.

M & S brands need improvement as the retailer has lost the customer base of the ageing population. Instead, the retailer needs to focus on the new and younger generation as the ultimate customers (Holmes 2009, p.9; BBC News 2001). It can also adopt a global strategy with the aim of increasing its competitive advantage and operative synergy.

Reference List

Alon, I 2006, Service franchising a global perspective, Springer Science & Business Media, New York.

Alon, I 2000, Marks & Spencer: A case study in international retailing. Web.

BBC News 2001, Web.

Bianchi, C C. & Ostale, E 2005, ‘Lessons learned from unsuccessful internationalization attempts: Examples of multinational retailers in Chile’, Journal of Business Research, vol. 59, pp.140– 147.

Brangigan, T 2008, ‘M&S opens first store in China’, The Guardian, 2 October, p. 2.

Burt, S. L., Mellahi, K., Jackson, T. P., & Sparks, L 2002, ‘Retail internationalization and retail failure: Issues from the case of Marks and Spencer’, Int. Rev. of Retail, Distribution and Consumer Research, vol. 12, no.2, pp.191-219.

Davey, J 2012, ‘Marks & Spencer profit fall shows retail pain’, Reuters, 8 November.

Finch, J 2006, ‘M&S aims to open 150 new stores overseas’, The Guardian, 21 June.

Hall, J 2008, ‘Marks & Spencer joins with Reliance to open 50 stores in India’, The Telegraph, 19 April, p. 1.

Holmes, L 2009, ‘Bolland looks east to rebuild the fortunes of M&S’, The Telegraph, 22 November, p.1-2.

Kollewe, J 2010, ‘Marks & Spencer plans to re-enter European markets’, The Guardian, 31 October, p.1-2.

Lasserre, P. (2008). Global strategic management, Palgrave Macmillan, New York.

Marian, P 2011, Web.

Mellahi, K, Frynas, G J & Finlay, P 2006, Global strategic management, Oxford University Press, Oxford.

Rowly, E 2009, ‘M&S admits China setbacks’, Corporate Finance News, 10 February, p.1.

Roy, S 2008, ‘The biggest opportunities we see in India’, The Wall Street Journal, 28 April, p.1-2.

Steve, B 2002, ‘The failure of retail internationalisation in Marks and Spencer (1)’, European Retail Digest, 1 September, p. 3.

Trotman, A 2011, ‘Marks & Spencer chief Marc Bolland turns to India and China following better-than-expected profit rise’, The Telegraph, 24 May, p. 1.

Tryhorn, C 2009, ‘Head of M&S’s first Chinese store leaves job’, The Guardian UK, 18 January, p.1.

Tu 2008, ‘China becomes panacea for multinational retailers’, The Financial Times, 13 November, p.1-2.

Yan, Z 2008, ‘Making its mark’, China Daily, 27 October, p. 2.

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