INTERNATIONAL

RETAILING

MARKS & SPENCER

CASE STUDY
(re do)
Sem - iii

Submitted By: Shubhankar Mishra

Course: PGDRM (04)
Roll No: 51

1. What are the factors which led M&S to internationalize?

Ans. Internationalization of the company was mostly due to the
domestic factors.
Internally, the company started to feel that it has saturated to
domestic market and that expansion will have to come from
overseas.
Externally, some Labor Party members were suggesting
nationalizing the leading domestic retailers.
Internationalization was, therefore, seen as a tool of
diversification.

2. What is the sequence of country entry and why was that

sequence selected?
Ans. Sequence of country entry is:
i.

Canada (1973)

ii.

European market (1975)

France
Belgium
Spain
Germany

iii.

United states (1988)

iv.

Far East
Japan
Hong-Kong
This sequence was selected because M&S saw these
countries as a developed economy like their own country.
They started with Canada and then with European
countries because people living in these countries having
high incomes, good infrastructure and use of English
language. So they thought to expand through these
countries.

3. What are the modes of entry used in the various countries

and why?
Ans. There are many modes of entries used in the various
countries are:
i.

Exporting and Franchising: - these are less risky modes of

entry in markets where market and political risk are high.

ii.

Sole-ownership and Acquisition: - where the purchasing

power is high, large population and developed
infrastructure.

iii.

Joint venture: - when there is less knowledge about the

culture and political climate of a country.

4. Which host country factors M&S seems to value and which

do they dont?
Ans.
i.

M&S seems to value the factors of France as they adopt the

store to French life styles. The French stores offered snugger
fit clothing, a wide selection of French wines, and less
British imports.

ii.

They also valued the factors of US after buying Brooks

Brothers they did not change the name of the US chain,
probably because of their loyal customer base.

iii.

They dont value the factors of Canada because they thought

that the economy and infrastructure of Canada is somewhat
like UK, which will lead to the closing down of the stores in
Canada.

5. Describe and explain the adaptation to M&S business

model in different countries.
Ans.
i.

Canada: - M&S enters in Canada through acquisition of

Canadian peoples Department stores (budget retailer),
DiAllairds (older womens store), and Walkers store
(modeled after British M&S format).

M&S perceived little cultural distance; they transferred their

business formula almost unchanged from the UK to
Canada. They quickly found that even Canada requires
some modifications.
ii.

United States: - there also they entered through similar

strategy they used in Canada, acquisition. M&S bought
Brook Brothers a department store, to market their clothes.
But they did not change the name of the US chain because
of their loyal customer base.

iii.

France: - M&S entered their in 1975; they decided to adopt

the store to French life styles. The French stores offered
snugger fit clothing, a wide selection of French wines, and
less British imports.

6. Is M&S multinational or global retailer? Explain and

defend your answer.
Ans. M&S is a multinational retailer because they are having
different strategy for different countries.
Example:
i.

In Canada, they customize the products according to the

needs of the people.

ii.

In France, M&S decided to adopt the store to French life

styles.

iii.

In United States, they did not change the name of the

acquired department store because of their loyal customer
base. M&S invested in a new warehouse management
system to increase service efficiency.

7. Where is M&S on the internationalization life cycle?

Explain how you formed your answer.
Ans.
i.

M&S is on the maturity stage of internationalization life

cycle in case of European countries and United States
because they are dealing in international market since 1973.
And they are having their outlets in most of the European
countries.

ii.

M&S is on the growing stage of internationalization life

cycle in case of Asian countries because they are having less
number of stores in Asian countries.

8. Should the company standardize more of their

international operations? Compare Europe and Asia.
Ans. No, the company should standardize some of their
international operations because there is a difference in the
market conditions in Europe and Asia. Most of the European

countries are developed so that the purchasing power of the

people is high, good infrastructure is there. But in Asian country,
most of the countries are developing so that the purchasing power
of the people is less.
Most of the sourcing of products done by M&S is from UK,
so that the price range of those products will be higher. These
products are easily saleable in European countries because of
higher purchasing power of the people. It is necessary for M&S
that they will manufacture or acquire products from the local
vendors of an Asian country so the cost of the product remains
low and people will prefer to buy their products in Asian
countries.

9. What should be the future strategy of the firm?

Ans.
i.

M&S should acquire top management personnel from the

host country. So that M&S will have better knowledge
about that countries scenario.

ii.

M&S should increase advertisements, which will help them

to be recognized by the people of a country.

iii.

Decentralization of authority to the employees.

iv.

M&S should buy their clothes from the domestic

manufacturer so that the cost of the product decreases or
lower down. And new innovations and ideas took place.

10.

Evaluate top managements response to the crisis?

Ans.
i.

Job cuts: - company announced to cut 15% of its 1900

managers jobs. Senior management numbers were cut by
25%. The board has been reduced from 22 to 7.

ii.

Price cuts: - many of the clothing lines are discounted by as

much as 15%. The prices of a third of all merchandise have
been cut by 2%-3%.

iii.

Reorganization: - M&S was reorganized into three profit

centers:
UK retailing
Overseas retailing, and
Financial services

iv.

New marketing department was set up to help create

improved
Competitive analysis
Information gathering
Proactive communication
Advertising clarity, and
Customer targeting

v.

11.

The company will attempt to develop a more balanced

sourcing policy to its domestic and international outlets and
will review global logistics to streamline distribution and
lower costs.
Evaluate M&S cross-cultural skills?

Ans. M&S cross-cultural skills are very much correct as they are
able to enter in different countries and are able to survive in
different situations.
Example:
i.

Like in case of France, they adopt the store to French life

styles.

ii.

In US, they acquire a department store but they did not

change the name of that store because of its loyal customer
base.

iii.

In Canada, they customize the product according to the

needs of the customers at later stage but they are not able to
survive over there.