Global And Transnational Business Assignment - Marks and Spencer

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Global AndTransnational Business
Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1Why Marks and Spencer withdrawing from international market..............................................1CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14
INTRODUCTIONGlobal business is an economy activity which takes place across different countries. Thetransnational business is also known as multinational corporation which has home base but it isregistered, operates and has is assets more than one country at a time. There is neck to neckcompetition in the market so to overcome these competitors businesses are going global. But thebitter truth is that, it is not easy for organisations to access and sustain in global market due to thecertain reasons like competition and cultural differences etc. But on the other hand, it can be saidthat the transnational and global business gives an opportunity to businesses to growsubstantially and expand their market share. To better understand this concept, Marks andSpencer case has been analysed. It is a British multinational retailer which deals in sellingclothes, home products and food products.Analysis regarding withdrawing of Marks and Spencer from international market byexamining market structure and demand condition is being discussed in this report. Apart fromthis, entry modes the company adopted, barriers which company faced, theoretical frameworkand external and internal factor which affected business is also analysed and discussed in thisproject. On the basis of above analysis, the recommendation has also been made for companyregarding re entry in this report.MAIN BODYWhy Marks and Spencer withdrawing from international marketThe Marks and Spencer was founded in 1884 in UK with aiming in textile retail sector. Inyear late 1990's company planned to go global in order to expand their business and maximisetheir revenues. It was the first British retailer which has made around GBP 1 billion pre tax profitin 1998. But by year 2000's company has started closing its stores in international market due toheavy losses.Withdrawing from market is very tough for the companies as they invest huge amount infor starting its operations. So it is very important for business organisations to outline theirstrategy according to market needs so that company can survive for long time period in marketplace. There can be various reasons for company to close down their store in such huge numbers.As it is very difficult for the organisations to access and sustain in global market which can beseen from action of Marks and Spencer which they have taken in previous years (Toffel, Short1
and Ouellet, 2015). The company is operating its business operations globally due to somereasons Marks and Spencer is withdrawing from some of foreign markets like China, France andScotland. In these three countries, company was not performing up to the mark so managementhead has taken the decision to shut down their stores. China is a big market from which Marksand Spencer is closing the store. As there might be various reasons that company could notsustain in the China market.Reason of Marks and Spencer failure in China:The Marks and Spencer entered in the China market in year 2008 and opened it first storein China. After than it has expended their stores and opened 16 stores in 8 cities. The mainreason for entering in China, due to ample number of middle class population company lookedfor better opportunity to grow (Stone and Ladi, 2015). And China had the rapid growth rate alsoso company thought they could grab more market share. There were some reasons due to whichcompany withdraw from the market these are as follows:Entry Modes adopted by Marks and Spencer in China:The Marks & Spencer had entered in china market as wholly owned subsidiaries whichcauses the biggest failure for company. As company was not able to attract local Chineseconsumer which leads to biggest failure and finally company had to withdraw from country.Market structure:The market structure refers to the various number of firms manufacturing same goodsand services in the market and whose structure is decided on basis of competition which isavailable in market. There is four type of market structure which needs to be analysed by everycompany before entering into new market. The China has perfect competition market and M&Shad to analyse this and than according to that planned their strategy. So the company could notable to assess that which caused big failure for them and company had to withdraw from themarket.Demand Condition:The demand condition of a country make huge impact on the performance of company.Marks and Spencer has faced several problems while entered in china market and this is one fthem. Company has experienced a dip in its performance which considerably lower than theyexpected. The outlet opened in the Mainland China was not able to fulfil needs of Chinese2
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