International Business | Case Study Report

International Business
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Introduction
The century old Britain Company known by Marks & Spencer is the retail giant and is mainly
famous for dealing in clothes and foods. There are certain additions that the company has
made in recent past in the fields of furniture, gifts and household items. The business has its
roots in 1900’s and it begin under the leadership of Michael Marks and Thomas Spencer. The
company has grown in twofold and have made it big through its process of international
expansion. The company have adopted various forms of international modes of entry to
increase its organic growth which has made it globally well established to seek opportunities
in new areas and increase its customer base.
M&S Australia is aimed at providing competitive environment at a localized version but
recently the company had been facing issues in operating the manufacturing segment in its
Australian plant. As a result, the company has decided that to combat the problem of low
market share in M&S Australia; company is determined to open a manufacturing unit of
fabrics in Bangladesh. This will help the company to get access to the textile and
manufacturing environment in Bangladesh with the aim of utilizing its resources.
The outside environment of M&S is sensitive to technology and economic factors and as it is
facing attack from its Australian competitors. Moreover, it is important that establishing a
manufacturing plant in a developing economy like Bangladesh will not only help the
company to reduce its cost but will even help in boosting its degrading sales due to supply
factors.
Transformation of M&S operations in Bangladesh (Background)
M&S have been facing problems of underperformance as the Australian customers will not
think through the value proposition on cotton fabrics over its prices. The mounting supply
chain inadequacies has been growing since the past decade and has been hampering its sales

(Armstrong 2018). The company has applied all strategic option and planning to reformulate
the business (Hanno 2017). However, this is only possible if its shifts its manufacturing
operations in a low priced country where it can increase its sales and reduce its cost of
manufacturing (Eley 2020).
The decision taken by the company’s top management to undertake its operation in a
developing country to decrease its costs and increase its hold in Australia. This not only gives
M&S an advantage of transformation into an international firm with its continued textile
operations in Bangladesh but even helps the company to regain its lost market share in
Australian clothing.
Manufacturing and Trade Environment in Bangladesh
Textile Manufacturing
Bangladesh is the second largest exporter of garments in the world which makes it a hub of
textile operations with having more than 100 factories/ manufacturing units of garments
(Yadlapalli, Rahman and Gunasekaran 2018, pp.135-149). The country has low level of
safety for the workers with poor rights which is an advantageous position for an apparel
company to utilize its resources to the fullest with less costs involved (Rafe 2020). Textile
industry in Bangladesh has experience of working in apparel industry for more than 500 years
which has led to substantial improvement in fabric manufacturing (Ahmed and Nathan 2016,
pp. 51-77). Moreover, any other country like Bangladesh holds the dependency of developed
nations for carrying out their manufacturing options. The apparel producers in Bangladesh
have accounted for $20 billion business by just exporting fabrics to the developed nations
(Hasan et al. 2016, pp. 39-48).
M&S can benefit from Bangladesh with abundant opportunities, utilization of resource sand
government policies. The labor found in Bangladesh is cheap and abundant making its highly