M&S in Australia: International Business & Country Analysis

This presentation assesses Marks and Spencer's potential international expansion into the Australian market. It highlights the company's competitive advantages, such as its standardized supply chain management and customer satisfaction focus. The analysis employs Porter's Five Forces to evaluate the competitive landscape, including the threat of competition, substitutes, new entrants, and the bargaining power of buyers and suppliers. The presentation also examines country risks and exposures through a PESTLE analysis, covering political, economic, social, technological, legal, and environmental factors. Key considerations include political stability, a strong economy, social trends, technological advancements, legal regulations, and environmental concerns. Furthermore, it addresses potential financial risks, such as foreign exchange rate fluctuations and interest rate risks. The presentation concludes with recommendations for Marks and Spencer, suggesting a joint venture approach to leverage local knowledge and comply with legal requirements, while utilizing its brand name and competitive advantages to capture market share. The document is available on Desklib, a platform offering a wide array of study resources for students.

INTERNATIONAL
BUSINESS

INTRODUCTION
The presentation brings out a discussion of
important points which has to be considered
while internationalisation an organisation. In
context of this presentation, marks and
spencer is chosen as an organisation.
Marks and spencer is an major British
multinational retailer headquartered in London.
The company is listed on London stock
exchange. In 2016, the company has launched
new online store to target the Australian online
shoppers.
(Source: UK investor, 2019)

COMPETITIVE ADVANTAGE OF
MARKS AND SPENCER'S
• Marks and spencer is well known for its standardised and
information-emerged management style of supply chain
management.
• Standardisation is the company`s consistent style, type and design
of store layouts, product quality, and even staff of their service
program has a standard.
• Managing the standards is the greatest advantage that can save a
lot of management cost.
• “Customer satisfaction” is the business philosophy of Marks and
spencer.

PORTER`S FIVE FORCES
MODEL
Threat of Competition
• Marks & spencer is not only vulnerable to
food products but also apparels,
supermarkets and households such as
Tesco, Asla, Zara, John Lewis and
Sainsbury.
Threat of substitutes
The threat of substitutes is low. Other
retailers for food and apparel products
have direct rivals. For example- in food
market, Waitrose can be direct rival and
for apparels, the direct rival can be peter
Jones. (Source: LinkedIn corporation,2011)

Threat of new domestic and international entrants
It needs huge capital investment to set a chain of retail stores.
Australian market is mature enough and to promote Marks and
spencer, it needs to maintain its competitive advantage even
when it is incurring profit in short run.
Bargaining power of buyers and suppliers
Australian market is well concentrated with buyers. There are
enormous alternatives and certain switching costs that can be
lower for the customers. Moreover, the bargaining power of the
suppliers can be adjusted as it already maintains a standardised
image in the business world.

POTENTIAL COMPETITIVE
ADVANTAGE
• As marks and spencer enjoys a considerable
brand name in the retail world. While
entering into Australia, the company can
start by offering wide range of products
from apparels, households, to food.
• This huge offering will help the company to
grab the market share in the Australia`s
retail industry.
• The company already provides standardised
products that can be a differentiation
strategy for the company while offering
products.
(Source: Carubba, 2018)

COUNTRY RISKS AND
EXPOSURES
• Country risk is defined as risks that
affect the investors and foreign direct
investors.
• Country risks differ from country to
country. In order to define this risk,
certain risks have to be considered such
as political risks, economic risks,
transfer risks, and exchange-rate risks
(Sadhye, 2014).
• It is the degree to which economic and
political unrest influence the FDI or the
securities of various issuers who do
business in Australia. (Source: LinkedIn corporation, 2011)

POLITICAL RISK
• Meaning- political factors refer to stability of political conditions and how
attitude of political parties affect the business operations.
• Australia is a liberal and capitalistic democratic country. The political
conditions of Australia promotes free trade for retail business by
liberalising the economy.
• Marks and spencer's can get the support of political conditions as
Australia has a strong national government, provides equal opportunities,
efficient and transparent legal framework.

• Some of government intervention in the international business-
• Tariffs
• Subsidies
• Import quotas
• Currency controls
• Anti-dumping rules
• Free-trade zone
• Export financing
• Administrative policies
• Marks and spencer will be supported by country`s political stability and
favourable taxation system. It also provides a competitive business cost
with world class infrastructure.

ECONOMIC FACTORS
• Australia has a strong economy with high
per capita GDP.
• Australia has large service sector that
signifies the company will be efficient
enough to operates delivery to its
customers.
• In case of Australia- the country`s GDP was
estimated as AUD 1677.47 billions in 2016.
Moreover, per capita GDP is estimated at
USD at 51850.27 and the purchasing power
parity on the basis of per capita GDP is
estimated at USD 1187.32. (Source: Statista,

SOCIAL FACTORS
• Social trends of the country have a crucial
impact on whole retail sector and Marks and
spencer.
• In case of Australia- the Country`s population
is estimated at 24.281 million in 2016 and it is
expected to reach 26.425 million till 2022. the
country`s unemployment rate was 5.73
percent of total workforce.
• While analysing the social conditions, it is
seen that 81 percent of the population speaks
English.
(Source: Statista, 2019)

TECHNOLOGICAL FACTORS
• Availability of technology factors helps the
company to improve its supply chain, customer
services and sales. With the increasing growth of
technology has increased the number of
organisations in retail sector.
• In Australia, the household access to the
internet has increased from 1.1 million in 1998
to 4.7 million in 2006.
• The country`s expenditure on the research and
innovation has reached more than $15.7 billion
in 2005 and it increased at 40 percent in last few
years.
• Australia`s businesses generally account for 54
percent expenditure on R&D (Singizi, 2018).