INTERNATIONAL RETAILING

MARKS & SPENCER CASE STUDY

(re do) Sem - iii

Submitted By: Shubhankar Mi hra C!ur e: PG"RM #$%& R!'' N!: ()

)* +hat are the ,a-t!r .hi-h 'ed M&S t! internati!na'i/e0 Ans. Internationalization of the company as mostly d!e to the domestic factors. Internally" the company started to feel that it has sat!rated to domestic mar#et and that e$pansion ill ha%e to come from o%erseas. E$ternally" some &a'or (arty mem'ers ere s!))estin) nationalizin) the leadin) domestic retailers. Internationalization as" therefore" seen as a tool of di%ersification.

1* +hat i the e2uen-e !, -!untry entry and .hy .a that e2uen-e e'e-ted0 Ans. Se*!ence of co!ntry entry is+ i* ii* Canada #)345& Eur!6ean market #)34(& 7ran-e Be'8ium S6ain Germany

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9nited tate #)3::& 7ar Ea t <a6an =!n8>K!n8 This se*!ence as selected 'eca!se M&S sa these co!ntries as a de%eloped economy li#e their o n co!ntry. They started ith Canada and then ith Eur!6ean co!ntries 'eca!se people li%in) in these co!ntries ha%in) hi)h incomes" )ood infrastr!ct!re and !se of En)lish lan)!a)e. So they tho!)ht to e$pand thro!)h these co!ntries.

5* +hat are the m!de !, entry u ed in the ;ari!u -!untrie and .hy0 Ans. There are many modes of entries !sed in the %ario!s co!ntries are+
i.

E?6!rtin8 and 7ran-hi in8+ - these are less ris#y modes of entry in mar#ets here mar#et and political ris# are hi)h.

ii.

S!'e>!.ner hi6 and A-2ui iti!n+ - here the p!rchasin) po er is hi)h" lar)e pop!lation and de%eloped infrastr!ct!re. <!int ;enture+ - hen there is less #no led)e a'o!t the c!lt!re and political climate of a co!ntry.

iii.

%* +hi-h h! t -!untry ,a-t!r M&S eem t! ;a'ue and .hi-h d! they d!n@t0 Ans.
i.

M&S seems to %al!e the factors of ,rance as they adopt the store to ,rench life styles. The ,rench stores offered sn!))er fit clothin)" a ide selection of ,rench ines" and less -ritish imports. They also %al!ed the factors of 9S after '!yin) -roo#s -rothers they did not chan)e the name of the US chain" pro'a'ly 'eca!se of their loyal c!stomer 'ase. They don.t %al!e the factors of Canada 'eca!se they tho!)ht that the economy and infrastr!ct!re of Canada is some hat li#e 9K" hich ill lead to the closin) do n of the stores in Canada.

ii.

iii.

(* "e -ribe and e?6'ain the ada6tati!n t! M&S bu ine m!de' in di,,erent -!untrie * Ans.
i.

Canada: - M&S enters in Canada thro!)h ac*!isition of Canadian people.s Department stores ('!d)et retailer)" "iA''aird@ (older omen.s store)" and /al#er.s store (modeled after -ritish 01S format).

M&S percei%ed little c!lt!ral distance2 they transferred their '!siness form!la almost !nchan)ed from the 9K to Canada. They *!ic#ly fo!nd that e%en Canada re*!ires some modifications.
ii.

9nited State : - there also they entered thro!)h similar strate)y they !sed in Canada" ac*!isition. 01S 'o!)ht -roo# -rothers a department store" to mar#et their clothes. -!t they did not chan)e the name of the US chain 'eca!se of their loyal c!stomer 'ase. 7ran-e: > M&S entered their in )34(2 they decided to adopt the store to ,rench life styles. The ,rench stores offered sn!))er fit clothin)" a ide selection of ,rench ines" and less -ritish imports.

iii.

6.

I M&S mu'tinati!na' !r 8'!ba' retai'er0 E?6'ain and de,end y!ur an .er*

Ans. M&S is a m!ltinational retailer 'eca!se they are ha%in) different strate)y for different co!ntries. E$ample+
i.

In Canada" they c!stomize the prod!cts accordin) to the needs of the people.

ii.

In 7ran-e" M&S decided to adopt the store to ,rench life styles. In 9nited State " they did not chan)e the name of the ac*!ired department store 'eca!se of their loyal c!stomer 'ase. M&S in%ested in a ne areho!se mana)ement system to increase ser%ice efficiency.

iii.

4* +here i M&S !n the internati!na'i/ati!n 'i,e -y-'e0 E?6'ain h!. y!u ,!rmed y!ur an .er* Ans.
i.

M&S is on the mat!rity sta)e of internationalization life cycle in case of Eur!6ean -!untrie and 9nited State 'eca!se they are dealin) in international mar#et since )345. And they are ha%in) their o!tlets in most of the E!ropean co!ntries. M&S is on the )ro in) sta)e of internationalization life cycle in case of Asian co!ntries 'eca!se they are ha%in) less n!m'er of stores in Asian co!ntries.

ii.

8.

Sh!u'd the -!m6any tandardi/e m!re !, their internati!na' !6erati!n 0 C!m6are Eur!6e and A ia.

Ans. 3o" the company sho!ld standardize some of their international operations 'eca!se there is a difference in the mar#et conditions in E!rope and Asia. 0ost of the E!ropean

co!ntries are de%eloped so that the p!rchasin) po er of the people is hi)h" )ood infrastr!ct!re is there. -!t in Asian co!ntry" most of the co!ntries are de%elopin) so that the p!rchasin) po er of the people is less. 0ost of the so!rcin) of prod!cts done 'y 01S is from U4" so that the price ran)e of those prod!cts ill 'e hi)her. These prod!cts are easily salea'le in E!ropean co!ntries 'eca!se of hi)her p!rchasin) po er of the people. It is necessary for 01S that they ill man!fact!re or ac*!ire prod!cts from the local %endors of an Asian co!ntry so the cost of the prod!ct remains lo and people ill prefer to '!y their prod!cts in Asian co!ntries.

3* +hat h!u'd be the ,uture trate8y !, the ,irm0 Ans.

i.

M&S sho!ld ac*!ire top mana)ement personnel from the host co!ntry. So that M&S ill ha%e 'etter #no led)e a'o!t that co!ntries scenario. M&S sho!ld increase ad%ertisements" hich ill help them to 'e reco)nized 'y the people of a co!ntry. Decentralization of a!thority to the employees. M&S sho!ld '!y their clothes from the domestic man!fact!rer so that the cost of the prod!ct decreases or lo er do n. And ne inno%ations and ideas too# place.

ii.

iii.
iv.

)$* Ans.
i.

E;a'uate t!6 mana8ement@ re 6!n e t! the -ri i 0

<!b -ut : - company anno!nced to c!t )(A of its )3$$ mana)ers 5o's. Senior mana)ement n!m'ers ere c!t 'y 1(A* The 'oard has 'een red!ced from 11 to 4. Pri-e -ut : - many of the clothin) lines are disco!nted 'y as m!ch as )(A* The prices of a third of all merchandise ha%e 'een c!t 'y 1A>5A* Re!r8ani/ati!n: > M&S as reor)anized into three profit centers+ 9K retailin) 6%erseas retailin)" and ,inancial ser%ices

ii.

iii.

i%.

3e mar#etin) department as set !p to help create impro%ed Competiti%e analysis Information )atherin) (roacti%e comm!nication Ad%ertisin) clarity" and C!stomer tar)etin)

%.

The company ill attempt to de%elop a more 'alanced so!rcin) policy to its domestic and international o!tlets and ill re%ie )lo'al lo)istics to streamline distri'!tion and lo er costs. E;a'uate M&S -r! >-u'tura' ki'' 0

))*

Ans. M&S cross-c!lt!ral s#ills are %ery m!ch correct as they are a'le to enter in different co!ntries and are a'le to s!r%i%e in different sit!ations. E$ample+
i.

&i#e in case of 7ran-e" they adopt the store to ,rench life styles. In 9S" they ac*!ire a department store '!t they did not chan)e the name of that store 'eca!se of its loyal c!stomer 'ase. In Canada" they c!stomize the prod!ct accordin) to the needs of the c!stomers at later sta)e '!t they are not a'le to s!r%i%e o%er there.

ii.

iii.