01) What are the factors which led M&S to internationalize?

In 1940s Marks & Spencer (M&S) began their internationalization.

Early internationalization of the company was mostly due to domestic factors such as,
Internally, the company started to feel that it has saturated to domestic
market and that expansion will have to come from overseas.
Externally, some Labour Party members were suggesting nationalizing the
leading domestic retailers.
Internationalization was, therefore, seen as a tool of diversification.
03) What are the modes of entry used in the various countries and why?
M&S used many modes of entries in the various countries. They are,
Exporting and Franchising: M&S used this mode because it is relatively
less risky modes of entry in markets where market and political risk are
high.
Sole-ownership and Acquisition: M&S chose this type of mode of entry
with countries which have significant purchasing power, large population
and developed infrastructure.
Joint venture: M&S used this mode because it was felt that the market
knowledge and power of an existing retailer will help mitigate the cultural
distance, and the sometimes adverse political climate.
04) Which host country factors M&S seems to value and which do they dont?
M&S seems to value factors of France because the company decided to
adapt the store to French life styles. The French stores offered snugger fit clothing, a
wide selection of French wines, and less British imports.
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.
M&S does not value factors of Canada. They thought Canada market
somewhat similar to UK market. So they transferred their business formula almost
unchanged from the United Kingdom to Canada. But they failed in Canada and lead
them to closing down the stores in Canada.

05) Describe and explain the adaptations to M&S business model in different countries.

Marks and Spencer of Britain (M&S) is a general retailer that sells

clothes, gifts, home furnishings, and foods under the St. Michael trademark in the UK,
Europe, the Americas and Far East. The company also operates financial services
segment. The companys mission is to offer consumers quality, value, and service. M&S
has encouraged British textile manufacturers to keep factories at home, which led to a
better check on quality and more flexibility in manufacturing and distribution. In 1940s
Marks & Spencer (M&S) began their internationalization.
M&S entered in Canada through acquisition of Canadian peoples
Department stores (budget retailer), DiAllairds (older womens store), and Walkers
store (modelled 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.
M&S entered the European market in 1975. This was two years after
the less than successful Canadian acquisition. France was chosen as the gateway country,
and Paris the gateway city, to the rest of Europe. The company decided to adapt the store
to French life styles. The French stores offered snugger fit clothing, a wide selection of
French wines, and less British imports. The company hopes to have 60 stores in
Continental Europe by year 2000. It is seeking to increase customization to local national
tastes by establishing additional brand names to the already successful St. Michael brand.
M&S entered US in 1988 through similar strategy they used in Canada,
acquisition. M&S bought Brook Brothers a department store, to market their clothes and
Kings Supermarket to sell its food line. But they did not change the name of the US
chain because of their loyal customer base.
The M&S entry into the Far East was twofold. M&S first exposure to
business in the Far East occurred indirectly through the purchase of Brooks Brothers
(1988), which co owned affiliates in Japan. M&S believes that Asia will be a major
market for Brooks Brothers because of the regions receptiveness to US culture and
brands aspirational values. The second penetration to the Far East was through the brand
name of M&S. M&S clothes are marketed as high quality western style items. M&S
opened stores in Hong-Kong, which were supplied through the British home base. All of
the wholly owned stores in the Far East are in Hong-Kong, the 33 other outlets are
franchised across six other nations in the region.
M&S used different types of adaptations in different countries when
acquiring new opportunities to their company.

06) Is M&S multinational or global retailer? Explain and defend your answer.

A multi-national organization has locations or facilities in multiple countries, but each

location functions in its own way, essentially as its own entity. Multinational companies have
investment in other countries, but do not have coordinated product offerings in each country.
More focused on adapting their products and service to each individual local market.
A global company also has locations in multiple countries, but theyve figured out to
create one company culture with one set of processes that facilitate a more efficient and
effective single global organization. Global companies have invested and are present in many
countries. They market their products through the use of the same coordinated image/brand in
all markets. Generally one corporate office that is responsible for global strategy. Emphasis
on volume, cost management and efficiency.
M&S is a multinational company as it is customizing its merchandise as per the need
of the country which they enter.

In Canada, they customize the products according to the needs of the people.

In France, M&S decided to adopt the store to French life styles. Due to a lack
of brand name recognition, the company also relied on advertising to spark
interest in the stores.

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.

M&S not a global retailer because they do not market their products through the
use of the same brand name (M&S) in the all markets theyre operating. In France they used
French styles and also in US they used acquired companies names to market their products.
So Marks and Spencer is a Multinational Retailer.

08) Should the company standardize more of their international operations? Compare
Europe and Asia.

No.
Standardization is a framework of agreements to which all relevant parties in
an industry or organization must adhere to ensure that all processes associated with creation
of good or performance of a service are performed within set guidelines. Standardization can
be found in business processes when companies require a consistent level of quality.
M&S should not standardize their some operations because,

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.
So M&S should not standardize their all operations as a multinational retailer.
09) What should be the future strategy of the firm?
Business strategy is long term plan of action designed to achieve a particular
goal or set of goals or objectives. Strategy is game plan for strengthening the performance of
the enterprise. It states how business should be conduct to achieve the desired goals.
M&S should adapt the multi nationalization because in multi nationalization
the company should customize its merchandise according to the need of customers of the
country in which the company is entering. M&S can follow following strategies for their
future strategy decision making.

M&S should acquire top management personnel from the host country. So that
M&S will have better knowledge about that countries scenario.

M&S should increase advertisements, which will help them to be recognized by

the people of a country.

Decentralization of authority to the employees.

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.