Marks and Spencer, having grown from a Penny Bazaar stall, is one of the UK’s leading retailers of quality clothing, food and home products. It is also an expanding international retailer with 296 stores in 40 territories (M&S 2009). In November 2010, Chief Executive of M&S said that the Priority markets 2020 were India and Shanghai (Murphy 2011). This report aims at reviewing the competitive edge and weakness and producing a set of recommendations to senior management of M&S on how it should proceed with internationalization.
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In order to render a decision to the present scenario, using Ansoff’s Matrix, Marks and Spencer must consider product development in order to enter into Food segment (Richardson and Evans 2007). Re-entering retail sector as a hyper-market through enhancing the existing products in terms of quality or introducing new products under M&S Brand would be helpful to tap the potential market for food and groceries. ITC sells quality foods representing mainly ready to eat foods, staples, confectionery and snack foods.
Marks and Spencer is adopting franchise model to sell in Chinese Retail Market. The Telegraph (December 2010) throws an insight on newly opened 3rd outlet of M&S in SkyMall, Shanghai, China. SkyMall, shopping mall, is a desolate and unpromising shopping centre situated in the outskirts of Shanghai. Marks and Spencer is doing the same mistake again and again by selling the British fit products in Shanghai. Data shows that H&M, Zara and Uniqlo had opened-up in SkyMall. Wrong franchise partners, who generally tend to target their competitors, have lacked synergy in fulfilling customer needs and convenience. Improper outlet location and lack in targeting customers continue to pop-up in M&S internationalization story which might result in failure and changes in direction (Burt et al. 2002).
As said in The Financial Express (February 2011), E-Retail can serve as an alternative medium for liquidating the excess inventories and saving up the excess premium real estate cost. A dynamic website displaying all the product lines should be built in India. Strong security measures should be taken while building the website for online sales. Same should be implemented in China with strong transport and logistics partner but the site should be built in Chinese local language to attract the customers.
Marks and Spencer adverts are quite less in numbers when compared to other retailers. In priority markets, where there is large number of TV viewers, M&S never tried to exploit the market using TV adverts. Chief Executive of Marks and Spencer in his annual presentation stressed on Facebook Fans where “Likes” and “Buying” makes lots of difference (Murphy 2011). Problem of being a “British Store” is also felt among customers. These reasons might make M&S to lose it strategic opportunity (Burt et al. 2002).
Proper franchise selection, in order to gain customer data, will help M&S in future developments relating to design, size and trends in international market. A new joint venture consisting of Marks and Spencer, Reliance Retail and ITC foods, will be helpful in market development to exploit the Indian retail conditions. A dynamic website with online sales platform must be developed as an alternative medium. Advertisements and other promotional activities will help in building the brand image of M&S in international market. Product development in terms of combining “British style” and “International sizes” is specifically needed to achieve growth internationally.
For Marks and Spencer, to achieve optimized efficiency and responsiveness, the organizational structure should be integrating the entire transnational network. Multi-dimensional information system by hiring local executives will be helpful in transfer of both customer and market knowledge. Culture of M&S organization should be team-mined which would be helpful to partners, franchise and M&S (Lasserre 2007).
After analysis of present business climate and past internationalization failures, the above recommendations have been arrived. In order to proceed with internationalization, M&S should review its global strategy and change some of its ownership models in order gain and maintain international market share. M&S will have a bright future internationally if it succeeds in managing the cultural difference efficiently.
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