Discuss about the Technological Collaboration in Strategy Industry.
The report throws light on examination of approaches on internationalisation inclusive of strategies across the various borders of Asia. Marks & Spencer is the particular company grounded in United Kingdom. The clear analysis of the different strategies and processed has to be discussed in the report as to provide detailed analysis of the problems and challenges faced by the organization in an effectual manner.
The main aim and purpose of the report is to understand the different challenges faced by M&S while entering the China market. It was noticed that M&S has done various ventures wherein there were few failures as the company failed to understand the different processes of performing business. There were different failures of the business in China, however the company gained huge profit in different parts of the world and Asia (Awate, Larsen & Mudambi, 2015). It has been noticed that the successful businesses have sought in order to increase the market share by expanding the different operations in various parts of the country.
Over few years, M&S have gained huge rocky business ventures in different parts of the foreign land in which they decided to expand their business. However, there were few ventures made by M&S were not successful. M&S opened different stores in various parts of the world along with franchises in different countries as well. However, such ventures did not prove to be as successful as it was expected by the company as there was more distraction than benefit gained by the company.
Furthermore, the abrupt and unannounced pullouts has caused huge disruption among the different loyal customers of M&S as they felt they were betrayed and they felt that the company did not feel it is necessary to inform them regarding any major decisions taken by them (Castaño, Méndez & Galindo, 2016). In China, when M&S could not able to improve their presence, they had to close their stores, however the franchisee strategy has helped them in opening the stores in China and other countries. Furthermore, M&S has adopted the product development strategy developed from Ansoff’s matrix to manage their focus in the China market and re-enter the market effectively as well (Bondy & Starkey, 2014). The model of Ansoff’s matrix is the best model that can be applied by Marks & Spencer as to gain more popularity in the market effectually.
Strategies for entering the Chinese market
M&S is the British retail organizations headquartered in Westminster, London. The respective company is listed in the London Stock Exchange and the main aim of the company is to be specialised seller of luxury and home goods to the customers. M&S tried to sell in the various marketplaces of Kellogg’s cornflakes that is in progress from the month of November in the year 2008 (Marksandspencer.com, 2018). The organization M&S was founded in the year 1884 in United Kingdom and M&S serves worldwide to all the customers. It has been noticed that there are more than 55% loyal customers of Marks & Spencer in worldwide.
There are about 84949 employees currently employed in M&S in different parts of the world and the company has tried to generate 10623 million revenues till 2017. It has been seen that in the entire world, Marks & Spencer is one of the largest retail stores that serves all the different demands of the customers. Furthermore, it was seen that M&S was not being able to cope up with strategy of the internationalisation in market of China as the techniques varied from different markets and this became a huge failure in the market (Cavusgil & Knight, 2015).
It was seen and noticed that M&S started with a small kind of store in the United Kingdom, however in the present scenario, it is the largest retail stores in the entire world. The company operates in different kind of retail, clothing, food and home-based products and services. The organization M&S tried to expand their presence internationally with about 255 stores in more than 40 territories in the entire world.
In the year 2010, the CEO of M&S has started to expand their presence in the different markets that included China along with entire Asia. The priority markets of M&S that will be targeted by them are India along with Shanghai (Chiarvesio, Marchi & Maria, 2015). The basic strategy adopted by M&S to enter into the different target markets was generally based on the retail market that has huge potentiality with application of the hyper-market-based format.
Furthermore, it was seen and noticed that M&S has planned to enter market of India by partnering with the Reliance Group and for China, it will be advantageous for the company to focus mainly on Shanghai than to focus on the entire China as this won’t be suitable for them in order to attract the different customers (Costa et al., 2017). Additionally, it has been noticed that the company has tried to expand their presence in Egypt. The main entry strategy that has been selected by M&S to enter the different markets is franchise model and they have applied the same model in entering into the Chinese market that is highly growing in Asia (Crick & Crick, 2014).
M&S has entered into the global market wherein the targets were Hong Kong and South Africa by exporting different kinds of products under the brand name. Furthermore, it was noticed that there was a huge failure faced by the company while entering into the Chinese market as the strategy did not work out and the venture failed in China as well. It was noticed that furthermore, M&S applied the franchising model as it was treated as the great option rather than opening their own store in the market (Dodgson, 2018). The choosing of appropriate franchisee will help in improving the market capturing strategy as this will improve the sales in the particular country as well.
However, after such incidents happened, the company decided to withdraw their international presence and concentrate on the home market entirely as well. The major reasons for the failure of the M&S in the international market were due to the failure of entry in few countries and the stiff competition in the market as well. The different requirements of the company in the internationalisation of M&S were not at all considered effectively the company (Dominguez & Mayrhofer, 2017). By the year 2001, the company M&S withdrew the different overseas operations and started concentrating on the domestic market. It was one of the best decision taken by M&S as there were various flaws that would have taken large amount of time to rectify the same. The entire global market has undergone a stage of recession wherein M&S was deeply affected and there were decrease in margin of profit more than 11% from the year 2005 to 2007 (Eisend & Schmidt, 2014).
The respective organization M&S has started analysing their past mistakes and then they structured their plans for the near future as well. M&S failed in the different kind of operations in the entire competitive market that has affected their goals and this created negative influence on the different effectiveness of the firms. Furthermore, the organization named M&S has tried to able to satisfy the needs and requirements of the different customers of the international market. M&S did not support the decision of manufactures in off-shore as there were dissimilar kind of issues related to quality (Estrin et al., 2016).
Furthermore, it was noticed that the company faced global recession from the year 2007-2009 and it caused huge trouble for the different organizations to cope up with such difficulties and issues effectively (Yemini, 2015). However, it was noticed that M&S was performing well and they were profitable in their business in 2009 with the increase of more than 17% in the profit. The particular company is enhancing their skills as to expand business in the worldwide marketplace with structured along with planned system as the main motive was to target the global market of consumers (Tubilewicz & Jayasuriya, 2015).
Current operations
In the present scenario, M&S has tried to adopt the franchise model as to sell the products in the Chinese retail market. There was an article published in the Telegraph that throws light and proper insight on newly opened 3rd outlet in the Shanghai market in China. The different data shows that the M&S has committed the same mistakes again by selling the products that are British fit in the market (Yemini, 2015). The improper outlet location has caused issues in targeting the customers and this caused huge issues in the market presently as well that caused the story of M&S to fail in their internationalisation in different markets. The panache of selling that has been espoused by M&S has altered to particular degree from product driven to the service driven methods (Johanson & Mattsson, 2015).
This has helped the company in analysing and identifying the demands of the customers in the market that are placed for the products and this cater to the needs in an appropriate manner. M&S has adopted franchise model in the entire Asian markets and they stopped operating their own adoption of markets. However, it was seen that the different kind of operational activities of M&S had been withdrawn by the company in the year 2001 and the organization tried to concentrate on the domestic market itself (Knight & Liesch, 2016).
There is various type of strategies that can be implemented by Marks & Spencer in UK and the company first started the business in Penny Bazaar Stall that is the largest retail markets in UK. M&S tries to provide quality food products in the entire market and this is expanding their retail stores in more than 300 stores in 40 countries (Mitter et al., 2014). Furthermore, M&S has tried to use the Ansoff’s matrix and adopted the product development strategy to enter into the food segment entirely.
With the implementation of the product development strategy, M&S requires to consider the different hypermarkets through enhancing existing products and introducing the new products that is delivered to them in effective manner. In order to analyse the decision in present era, M&S has been one the leading retail stores with the development of the products in the market along with influencing their presence in different parts of the world effectively. However, the adoption of the culture that has been done by M&S was a failure in the Chinese market (Rani, Yadav& Jain, 2015).
Failures and successes
There was a huge review in the current business strategy of Marks & Spencer that can benefit the market and build up market share with better positioning style adoption. Marks & Spencer can try to change the marketing style from product driven to the service driven style as this will assist the company in understanding the regional demand of the products and cater it accordingly. It is practically not possible for Marks & Spencer to perform planned in the internationalisation strategy (Schwens et al., 2017).
Furthermore, it was noticed that the respective organization has to create entire pressure on the different kinds of implementation strategies. The strategies of implementation are helpful in nature as this assist the company in managing the different production of the goods and services in an appropriate manner. From the current business environment scenario, it can be identified that M&S has achieved impressive rate of growth along with analysing the different kinds of other retail markets that deliver the same kind of products and services in the market.
Lastly, it was seen that M&S first acquisition was done in the year 1973 and this was the huge internationalisation project that was undertaken by them. However, furthermore, it ws noticed that the company could not succeed with the strategy of their internationalisation in the Chinese market as the product development strategy was not up to the marke
Marks & Spencer was experiencing decline in the entire sales in the market of China that led to decision taken by the higher authorities of M&S to withdraw the operations from respective areas. The company has made proper announcements to the different stores in China about the closure of the stores as there was continuous loss incurred in the organization. The organization had taken decision of closing the different markets that are based on operations in the respective country. The main reason for the closure of the market was the improper positioning of the brand in the respective country (Vahlne & Johanson, 2017).
The Marks & Spencer brand was not in the proper and appropriate position to capture the market of China with various kinds of products and services or quality of the same (Schwens et al., 2017). Marks & Spencer has committed different mistakes in the past that has caused due to lack of adoptability in retail market. Marks & Spencer could not able to perform in a proper manner in different areas as this has caused huge pressure on the marketing strategy adopted by them. Furthermore, it was noticed that the company had adopted the product development strategy in such a manner that has assisted them in handling the grievances of the customers.
Franchise model approach
The retailer had failed to adopt to the different changes in the market and they had failed to tailor the different apparels in accordance to the style preferences of the Chinese individuals. The locations wherein the stores of the organization have placed themselves is the major cause of failure for Marks & Spencer along with failure in the operations that were planned in Shanghai based in China. The plans that has been implemented by Marks & Spencer was to plan to open more stores in the China market as this can help and assist them in managing the stores in the organization effectively. It was noticed that the awareness of the brand was limited in China market and the individuals based in China did not have much idea on the services and products that are being offered to them by the company. The growth of the organization in the market has been challenging in nature, however it was noticed previously that the China market has provided different opportunities to different retail stores that have entered in the Chinese market (Schwens et al., 2017).
The company has tried to blame the confidence of the different customers in the market as there was a strong decline of the sales of the company. It was noticed that the company has incurred huge problems and losses in the year 2001 and this caused slowdown in the different activities performed by them. It was noticed that M&S products are divided in three kinds of business that includes the general kind of merchandise, financial services along with foods. The experimental environment at Marks & Spencer with the entire internationalisation started in the year 1940 and the organization started to export the different products and services in different parts of the world as well.
The early kind of internationalisation of M&S was mainly done due to the different factors that are domestic in nature. However, the organization internally started to feel that it has already saturated the domestic market and this expansion is required to come from overseas as well. The respective retail store has used different kinds of internationalisation strategy that helps them in maintaining the different kinds of entry modes effective in nature. While forming the international alliances, M&S preferred experienced retailer in the market as this focused mainly on the different kinds of techniques that will help and assist them in maintaining the structure accordingly.
Product development strategy
Conclusion
Therefore, it can be inferred that the internationalisation strategy has to be implemented by the companies to improve the different kind of activities that are performed by the organization in an effective manner. The different new plans of such strategy undertaken by Marks & Spencer in expanding their business internationally.
Marks & Spencer tries to expand the business internationally in order to increase their market operations. The globalisation is one of the most important factors that the different kind of successful companies has to analysed effectively. It was noticed that the respective company required to focus more on the different kind of internationalisation techniques as this will help them in being more competitive in nature. Furthermore, it was noticed that the company has to be more successful by introducing different products that are suitable in the India and China market and this will help them in gaining competitive advantage in the business.
Therefore, it can be recommended that on the basis of different issues faced by Marks & Spencer along with analysis of the current business climate, there are different changes related to the target market, mode of entry in new market, benefits to enter into the new market along with rectification of the past mistakes and analysis of objectives of internationalisation. Franchising is the great option than opening the own store and choosing the right franchise model will improve the market capturing in that particular Chinese market.
Proper concentration has to be provided on the brand positioning along with brand awareness as this will help the markets in making the customers aware about the brands and the products that are offered by the company. This will be no such confusion in the minds of the customers related to the different brands. However, this can be noticed that there can be possible kind of threat of not accepting products from different markets as there can be low demand for the same in the organization.
Marks & Spencer has to adopt different characteristics of the multinational organization wherein the revenue generated has to be retained in the respective department instead of transferring it to the entire home country. The benefit is that the entire organization does not have to manage the different foreign exchange from the world and these funds help in capitalising the further growth of the company and expansion in specific regions as well.
References
Awate, S., Larsen, M.M. & Mudambi, R., (2015). Accessing vs sourcing knowledge: A comparative study of R&D internationalization between emerging & advanced economy firms. Journal of International Business Studies, 46(1), pp.63-86.
Expansion in foreign markets
Bondy, K. & Starkey, K., (2014). The dilemmas of internationalization: Corporate social responsibility in the multinational corporation. British Journal of Management, 25(1), pp.4-22.
Castaño, M.S., Méndez, M.T. & Galindo, M.Á., (2016). Innovation, internationalization & business-growth expectations among entrepreneurs in the services sector. Journal of Business Research, 69(5), pp.1690-1695.
Cavusgil, S.T. & Knight, G., (2015). The born global firm: An entrepreneurial & capabilities perspective on early & rapid internationalization. Journal of International Business Studies, 46(1), pp.3-16.
Chiarvesio, M., Marchi, V.D. & Maria, E.D., (2015). Environmental innovations & internationalization: Theory & practices. Business strategy & the environment, 24(8), pp.790-801.
Costa, E., Soares, A.L., de Sousa, J.P. & Jamil, G.L., (2017). Information management for network transformation in industrial enterprises associations: the case of the internationalization process. In H&book of Research on Information Management for Effective Logistics & Supply Chains (pp. 415-436). IGI Global.
Crick, D. & Crick, J., (2014). The internationalization strategies of rapidly internationalizing high-tech UK SMEs: Planned & unplanned activities. European Business Review, 26(5), pp.421-448.
Dodgson, M., (2018). Technological collaboration in industry: strategy, policy & internationalization in innovation (Vol. 11). Routledge.
Dominguez, N. & Mayrhofer, U., (2017). Internationalization stages of traditional SMEs: Increasing, decreasing & re-increasing commitment to foreign markets. International Business Review, 26(6), pp.1051-1063.
Eisend, M. & Schmidt, S., (2014). The influence of knowledge-based resources & business scholars’ internationalization strategies on research performance. Research Policy, 43(1), pp.48-59.
Estrin, S., Meyer, K.E., Nielsen, B.B. & Nielsen, S., (2016). Home country institutions & the internationalization of state owned enterprises: A cross-country analysis. Journal of World Business, 51(2), pp.294-307.
Johanson, J. & Mattsson, L.G., (2015). Internationalisation in industrial systems—a network approach. In Knowledge, Networks & Power (pp. 111-132). Palgrave Macmillan, London.
Knight, G.A. & Liesch, P.W., (2016). Internationalization: From incremental to born global. Journal of World Business, 51(1), pp.93-102.
Marks&spencer.com. (2018). Welcome to Marks & Spencer. [online] Available at: https://www.marks&spencer.com/ [Accessed 13 May 2018].
Mitter, C., Duller, C., Feldbauer-Durstmüller, B. & Kraus, S., (2014). Internationalization of family firms: the effect of ownership & governance. Review of Managerial Science, 8(1), pp.1-28.
Rani, N., Yadav, S.S. & Jain, P.K., (2015). Market response to internationalization strategies: Evidence from Indian cross-border acquisitions. IIMB Management Review, 27(2), pp.80-91.
Schwens, C., Zapkau, F.B., Bierwerth, M., Isidor, R., Knight, G. & Kabst, R., (2017). International Entrepreneurship: A Meta?Analysis on the Internationalization & Performance Relationship. Entrepreneurship Theory & Practice.
Tubilewicz, C. & Jayasuriya, K., (2015). Internationalisation of the Chinese subnational state & capital: the case of Yunnan & the Greater Mekong Subregion. Australian Journal of International Affairs, 69(2), pp.185-204.
Vahlne, J.E. & Johanson, J., (2017). The internationalization process of the firm—a model of knowledge development & increasing foreign market commitments. In International Business (pp. 145-154). Routledge.
Yemini, M., (2015). Internationalisation discourse hits the tipping point: A new definition is needed. Perspectives: Policy & Practice in Higher Education, 19(1), pp.19-22.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
