Marks and Spencer has had ups and downs in its efforts at overseas expansion. The company is now making another effort to grow its international business. Imagine you are a consultant hired by M&S to review its current internationalization strategy. Referring both to past and current issues with M&S internationalization, and to the current business climate, prepare a report with recommendations to senior management on whether and how it should proceed with internationalization.
Internationalisation may be understood to be a way of expanding business or other activities beyond the domestic markets or boundaries. In other words, the growing interests of business houses in international market share and thereby their presence and involvement in markets outside the country of its origin, may be termed as ‘internationalisation.’ Over the past couple of decades in particular, the interest in international business has grown manifold amongst business analysts, researchers, trend watchers and of course, consumers themselves. The case in question is the internationalization of Marks and Spencer, the British retail giant and its failure to make an impact inn the International retail market. If one were to trace backwards into a bit of history and a significant part at that, one would easily recognize that the intent to go beyond the company’s present capacity – whether for economic reasons or political – and explore new vistas of operation, both for profit, control and to consequently impact the existing market;a case in all practicality may be the reference to the thriving British East India Company ( 17th CE ). What had started off as trade between Great Britain and India ( or rather princely states in India ) nearly three centuries ago, changed to the British Empire gaining dominion over not only India, but also almost two thirds of the world. Most certainly, such are not the current intentions of business houses since they operate independently following the regulations of mutually agreed policies of international trade between two or more countries. More so, the world political scenario has changed since the second world war and nations are in the mode of cooperation amongst themselves more than control over others through political or economic power. It would therefore be pertinent to mention here that the East India Company had to withdraw its operations due to India gaining independence in the mid twentieth century – not so long ago. A fresh start under different trade policies was made by several well established business houses thereafter.
Background of Marks and Spencer
Established as a stall in the Leads Market in 1884 by Michael Marks, Marks and Spencers or M&S, as the erstwhile retail giant is popularly known, drew much attention when the company announced the closure of several outlets across Europe and the sale of its Brooks Brothers clothing chain in both Japan and the USA, as well as the Kings supermarkets businesses in the USA, in March 2001. The impact of such decisions was so far reaching that there were protests across Europe due to losses in jobs and income. The Prime Minister of France, Lionel Jospin, stated that “ they should be punished” as the announcement was “particularly unacceptable” since it had been done without consulting the M&S employees which had indirectly caused “illegal troublemaking.” A french court went to the extent of imposing a penalty on the company for its “brutal behavior” in April, 2001. It further issued a stay order on the closures and warned the individual managers of all these Marks and Spencers stores of prosecution. Such was the uproar created in the international market scenario. To thus find one of the ‘world’s great retailers,’ whose rise to fame and popularity was legendary; where the company enjoyed an iconic status and regarded to be the ‘best managed and admired organisation’ in the business world, “fall from grace” within a short span of its operations overseas – approximately thirty years – was indeed shocking and unexpected ( Mellahi, Jackson and Sparks). According to Drucker 1974, the ‘managerial giant of the western world’ and Tse 1985, ‘one of the best managed companies in the world,’ M&S, whose branding of St. Michael had been a force to reckon with in the international and domestic business circuit, this unprecedented downturn was a great blow in view of the theories of internationalization and failure of business arising out of overseas expansion.
- Quote paper
- alex mueni (Author), 2013, Internationalization strategy for Marks & Spencer, Munich, GRIN Verlag, https://www.grin.com/document/271485