Sample Assignment on Global Business Strategy (Doc)

Global Business
Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
Background of Mark & Spencer Case Study.........................................................................1
Internal and external analysis.................................................................................................2
Identification of company's Sustainable Competitive Advantage..........................................4
Strategic Recommendations Based on Analysis and Discussion of Implementation Issues..6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
.........................................................................................................................................................9

INTRODUCTION
Globalisation refers to the process through which a business develop its international
influence or start performing its business over a global scale. Internationalisation of business will
open up several growth opportunities for business in term of expanding market share, customers
and profitability (Acquaah, 2013). Mark & Spencer is a British Multinational retailing brand
which has its headquarter in UK. It deals in different product categories like food, Household
products, clothing etc. This report elaborates about internal and external analysis of Marks and
Spencer. It further discusses about model which helps in Identifying company's Sustainability.
At last, it briefly provides recommendations on the basis of previous evaluations.
Background of Mark & Spencer Case Study
Mark & Spencer is a British multinational retailers which operates its business in selling
cloths, household accessories and luxury food products. It was established by Michael Marks and
Thomas Spencer in year 1884. But now after passing around 125 year in this sector, it has
become a biggest retailer in UK. M&S operates its business all over the world by maintaining a
chain of retail stores. It entered in international market by setting up franchises in various
countries like USA, Canada, Ireland, Belgium, France etc. But by the end of 19th century,
international trade of M&S get collapsed due to improper management of operations by senior
management of company. Hence, the company faced a heavier loss and decide to step back from
international market and focused on home market only. There are number of issues that company
faces in expanding its business off shore which it lead to withdrawn its business and focused on
domestic market to achieve sustainability. Some of the most common issues faced by Mark &
Spencer are as follows:
 M&S firstly enter in international market by targeting South Africa and Hong Kong by
exporting its product under the brand name of St. Michaels. After which company
terminated its contract with Do dwells which was the major mistake as the local retailers
and franchise provide a tough competition and did not allow it build up a strong presence.
 M&S targeted the Canadian market to expand its global presence through family tie-ups
and after which for broadening its customer base company entered in US market by
purchasing retail market chain named as King's supermarket (Bharadwaj and et. al.,
2013). But, North American market refused to accept M&S as competitive brand due to
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lack of branding and positioning effectiveness. As a result of which company fails to
achieve sustainability in market place because of high competition.
 Third major mistake done by M&S was that it did not shift its production to other
countries because of quality concern which in turn has increased the company's cost of
production. This in turn leads to charging higher price from customers which started
shrinking the market share of company.
These are the issues which lead Mark & Spencer to step back from global market and
more focused toward domestic market as they have to cover losses. Apart from this company
also get affected by the recession faced by global market and its profit share dropped down. But
it started recovering and by the year 2009 it become successful to increase profit as well as
market share respectively (DaSilva and Trkman, 2014). It has learned from past experience for
structuring its plan related to future growth and re-entering in international market. In this
direction, M&S focused toward improving their promotional activities by marketing its product
in various segments. Apart from this it also work over improving the multi-channel retailing,
growing space and building up current capabilities. These all supported Mark & Spencer in
becoming a most demanding and well known global brand.
Internal and external analysis
Mark & Spencer has faced several issues while entering in global market but by dealing
with all these threats, company is now consider as a biggest retailer in UK. So for its continual
growth and expansion in global market, company is required to analyse its internal as well as
external factors that may affect its operations. This information will help in formulating an
effective strategy that support M&S in achieving competitive advantage in market place and
expanding its business worldwide. The internal and external analysis is explained below:
Internal analysis:- It refers to the process of analysis the strength and capabilities that a company
have which act a driver for future growth. Internal analysis of Mark & Spencer can be better
performed using SWOT, a analytical tool which depict about strength, weakness, threat and
opportunity that a company have which support in formulating effective growth strategy.
Strength Weakness
 M&S has a multichannel presence such
as brick & mortar, online stores and
 Though Mark & Spencer offer a range
of products but still wrong publicity as
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also maintain long range of franchises
world wide (Ferraro and Briody, 2013).
This has created high brand image and
larger market share internationally.
 Company maintain a diversified
workforce which includes employees
from different religions, ethnicities etc.
This support company in catering the
need of people belong to different
culture.
a non trendy store affecting its profit.
As people believe that its stores offer
cloths for aged people only and not for
teenagers.
 Mark & Spencer doesn't maintain its
production house in different countries
which increases its cost of production.
Opportunity Threat
 Asian customer prefer to purchase
ethnic and traditional wear, so by
involving this category in their clothing
range company will be able to expand
its customer base.
 M&S can develop their own website
for selling its product or services
online.
 Major threat in front of company is
losing its customer base due to
increasing competition in market place
(Milne and Gray, 2013).
 M&S operates its business in different
countries and hence it may exposed to
different political facts.
External analysis:- It refers to process of evaluating the macro environmental factors in
order to determine the opportunities and threats that are present in external environment which
may affects the operations of company. This can be done using PEST tool which focuses over
analysing the external factors that must be consider by M&S as it may influence the business
operations (Oestreicher-Singer and Zalmanson, 2012).
Political Economical
 Political factor includes policies and
regulations formulated by government.
This may affect the profitability of
Mark & Spencer as it operates its
 Economical factors includes import-
export taxes, foreign exchange etc.
which may affect the sale and profit of
company. After getting recovered from
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business at different geographical area
and get exposed to several legislation
that are followed in particular region.
So, company must consider these
political environment before entering
into new market for avoiding nay legal
compliance or failure in particular
market.
global economy recession, people
become more brand conscious and
ready to pay any cost. This is a major
opportunity for M&S as they can cover
their off shore trade cost from its
products price.
Social Technological
 Social factor includes the taste, culture
and demand of customers which may
affect the business operations. As M&S
deals in clothing which is a most
changes prone segment where trend and
choice of customer changes frequently
(Peng, 2016). So, company must try to
offer trendy clothes for maintaining its
market share and keeping customer
satisfied.
 It includes factors like change and up-
gradation of technology which affect
the operations performed by company.
Technological sector is growing faster
and introducing several new
technologies for enhancing and
simplifying the production process.
This is an opportunity for M&S as they
can adopt these technologies to simplify
their operations which saves its time &
cost.
Identification of company's Sustainable Competitive Advantage
Retail industry is one of the fastest growing and competitive sector which experience
changes on regular bases as key players are focusing over eating one other market share by
enhancing their quality of services. So, in order to deal with such competitive environment Mark
& Spencer is required to formulate effective strategy. This can be done using Porter's five force
model which conduct a deep analyses over the industry to which company belongs and also
evaluate factors that influence the performance as well as operations of organisation. This can be
better understood using following points:
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Rivalry:- Competition in retail industry is relatively higher as the number of player are
expanding their business by diversifying the categories of product which also creates additional
competition within this sector (Rothaermel, 2015).. Hence, the competition is relatively higher
for Mark & Spencer because there are number of discount retail stores which are trying to
penetrating market by selling their product at lower price. But company is dealing with this
competition effectively by adopting line extension and diversifying their categories of product .
Apart from this it also expanded its business over internet which is a major factor behind its
sustainability at marketplace.
Threats to new entrant:- As the existing player are continuously increasing the
competition by bringing innovative approaches to serve their customer and become number one
at their choice. This increasing competition and also widen the criteria that must be fulfilled by
the new entrant in order to sustain in market place which requires huge investment. Hence, the
threat of new entrant is very limited for Mark & Spencer. This is a positive factor for the
company, as M&S offer high quality products which make it harder for new entrant to break
their loyal customers.
Threat of substitute:- M&S is required to innovate its product as well as processes in
order to keep its brand position stronger and be able to differentiate it from its competitors
because the threat of substitute is relatively higher (Spieth, Schneckenberg and Ricart, 2014). As
M&S operates its business in clothing which is more closer to substitute as competitors can
imitate the design of clothes and can sell it price lower than company. This may reduce the
customer base of Mark & Spencer, hence it must try to bring new designs on regular bases which
keep the interest of consumers toward company's product.
Bargaining power of buyer:- The customers has number of choices in market regarding
the product or services and because of which the bargaining power of buyers are relatively
higher. As there are number of retailers present in market which provide the product alike Mark
& Spencer and offer them over relatively lower price as compare to it. So, in order to maintain its
customer base M&S must try to build up number of loyal customers and try to offer them
unmatched values.
Bargaining power of supplier:- In order to reduce its cost of operation M&S has
outsourced its operations in other countries. This in turn has weaken the power of suppliers and
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in addition to this company's focus over private label also provide them power of suppliers.
Therefore, the bargaining power of supplier for Mark & Spencer is relatively lower.
Strategic Recommendations Based on Analysis and Discussion of Implementation Issues
From the above analysis information it has been found that Mark & Spencer has faced
several issues while internationalising its business which make company to step back and limit
its business to domestic market only (Stahl and et. al., 2012). After recovering from all the
losses, Mark & Spencer now started expanding its business in different nations. But the
competition is increasing rapidly which restrict the company to capture market share. So it is
recommended to M&S that it must deeply analyse the macro environmental factor of the country
it want to enter to determine the threats and opportunity present in that nations. This information
will support it in deciding whether there is any growth opportunity or not.
Mark & Spencer is recommended to focus on entering in larger market like China,
Europe etc. where there is already demand for this brand. Apart from this it must concentrate
over one particular market and position itself first before moving to another which support them
in getting established and acceptable by market (Verbeke, 2013). Mark & Spencer also focuses
on improving its promotional strategies like creating more TV commercials, advertisements over
social media sites, providing discounts over product much frequently etc. Because for every
market there should be a different and effective marketing medium which support them in
attracting customer toward it. But Mark & Spencer must perform its promotional activities by
keeping in mind the traditions, culture and lifestyle that the people of particular country or region
follows. Company must also changes it marketing style and convert it from product driven to
market driven. This will support Mark & Spencer in understanding the regional demand of their
product or services which in turn help them in catering the need of its customer much effectively.
In addition to this, Mark & Spencer is also recommended to offshore its manufacturing
unit so that different needs of customer can be satisfied and also support in reducing the
production cost. Company must also focus toward decentralising its operations and should
involve other regional departments in decision making process as it will support them in
improving the marketing process as expected by customers of that particular area. As M&S deals
in different product categories so it become very essential for them to balance their brand image
carefully (Voegtlin, Patzer and Scherer, 2012). It must segment and position its product at lowest
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possible level before entering into new market as it effective portfolio management will support
company in positioning its brand effectively. Mark & Spencer must reinvest the revenue into its
current department which in generated from the operation instead of transferring it to other
nations. This support them in enhancing the operations of that particular branch and also simplify
the work of company as they do not have to manage the foreign exchange around the world.
CONCLUSION
From the above given information it can be summarized that for maintaining and
expanding business internationally, a company must focuses on developing effectively strategy
for entering into market. As improper planning will leads to failure of company and it may face
sever loss that can also affect its brand image. So, company must perform internal as well as
external analysis of target market before entering into it using SWOT and PEST analysis. This
provide information regarding the growth opportunity or threats that are present in front of
company. Apart from this a company may also use Porter's generic strategy model which support
them in achieving competitive advantage at marketplace.
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REFERENCES
Books and Journals
Acquaah, M., 2013. Management control systems, business strategy and performance: A
comparative analysis of family and non-family businesses in a transition economy in
sub-Saharan Africa. Journal of Family Business Strategy. 4(2). pp.131-146.
Bharadwaj, A. and et. al., 2013. Digital business strategy: toward a next generation of insights.
DaSilva, C. M. and Trkman, P., 2014. Business model: What it is and what it is not. Long range
planning. 47(6). pp.379-389.
Ferraro, G. P. and Briody, E. K., 2013. The cultural dimension of global business. Upper Saddle
River: Pearson.
Milne, M. J. and Gray, R., 2013. W (h) ither ecology? The triple bottom line, the global
reporting initiative, and corporate sustainability reporting. Journal of business ethics.
118(1). pp.13-29.
Oestreicher-Singer, G. and Zalmanson, L., 2012. Content or community? A digital business
strategy for content providers in the social age.
Peng, M. W., 2016. Global business. Cengage Learning.
Rothaermel, F. T., 2015. Strategic management. McGraw-Hill Education,.
Spieth, P., Schneckenberg, D. and Ricart, J. E., 2014. Business model innovation–state of the art
and future challenges for the field. R&d Management. 44(3). pp.237-247.
Stahl, G. and et. al., 2012. Six principles of effective global talent management. Sloan
Management Review. 53(2). pp.25-42.
Verbeke, A., 2013. International business strategy. Cambridge University Press.
Voegtlin, C., Patzer, M. and Scherer, A. G., 2012. Responsible leadership in global business: A
new approach to leadership and its multi-level outcomes. Journal of Business Ethics.
105(1). pp.1-16.
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