Marks and Spencer's Expansion Into China Essay

Words: 4864
Pages: 20

FDA Business and Management level I
Working in an International context
Marks and Spencer’s Expansion into China

Contents Page
1. Introduction
2. Main factors influencing M&S to invest so heavily in china
3. Methods of FDI used by M&S In China
4. Differences in Business Model from China and Europe
5. Cultural & Organisational Risks
6. Future recommendation
7. Bibliography
8. Appendix

1. Introduction

The following report will address the expansion options available to Marks and Spencer (M&S) in China and Europe. The report will outline a recommended strategy plan for expansion in both areas, as well as give recommendations for future expansions in other countries.
Marks and Spencer is one of the leading
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Due to bad financial results in Europe it had become apparent that M&S Global ambitions had failed and as a result come to a halt. Rialp (2006) states that, “by 2002, M&S had failed to sell its 10 Hong Kong stores to a local franchisee and acquired direct ownership of the stores”. At this time M&S came up with a restructuring plan which was basically to focus on its home UK market rather than growth on international market. As M&S still had a presence in Hong Kong they were able to conduct some market research to understand Mainland Chinese people and their buying behaviour. The results showed that tourist from areas in mainland China represented almost 30% of their customers in their Hong Kong stores.
From these results alone it shows a clear indication that a move to Mainland China would be a very beneficial move and as a wholly owned store was used in Hong Kong showing no major problems. It would be ideal to share a similar strategy in Mainland China as they are very similar.
M&S has other market entry strategies that they have used in different countries around the world which could also be used in China. The two other strategies that they use are joint venture and franchise which is an indirect market entry strategy. One of the main advantages of these forms of market entry is that M&S could gain from local Knowledge of the agent or distributor that they are in partnership with. Both of these