Analysis of Marks and Spencer's International Business Strategy Report

This report provides a comprehensive analysis of Marks and Spencer's international business strategy. It begins with an introduction to the company, followed by an examination of its current state and opportunities within the retail industry, particularly in the US market. The report then delves into key frameworks, including the Yip framework, PESTEL analysis, Porter's Five Forces model, and a SWOT analysis to assess the company's strengths, weaknesses, opportunities, and threats. The PESTEL analysis considers political, economic, social, and technological factors impacting the business. The report also includes recommendations for Marks and Spencer to improve its international business performance, such as adopting current fashion trends and digital marketing strategies. The conclusion summarizes the key findings and emphasizes the importance of strategic analysis in international business. Finally, references are provided from academic sources and company reports.

INTERNATIONAL
BUSINESS
STRATEGY

Table of content
◦ Introduction
◦ Introduction of company
◦ Yip framework
◦ PESTEL analysis
◦ Porters five forces model
◦ SWOT analysis
◦ Recommendations
◦ Conclusion
◦ References

Introduction of company
◦ Marks and Spencer is a UK-based retailing company which is offering
its products in international business. It was established in the year
1884 by Michael Marks and Thomas Spencer in the UK. It is operating
in the retail industry which is a growing industry.
◦ Marks and Spencer is focusing on cost-cutting in order to sell its
products and service in less amount which also helps them to compete
in the marketplace. It is a strategy that is in response to a pre-tax loss of
around £201.2M in the year 2020. It is also identified by the company
that its sales of the company will increase by 20.5% in the year 2022.

Current state and opportunities
There are different types of opportunities in the retail industry which provide
opportunities for the business of Marks and Spencer. Some of these
opportunities accessed by company in the retail industry of the UK is
mentioned below:
Marks and Spencer’s sales and revenue have increased in the year 2022 in
comparison to the previous year by actively focusing on an online campaign
of the company. In the year 2022, it has earned around 10.9 billion British
pounds.
Due to Covid-19 breakthrough revenue of Marks and Spencer has decreased
in comparison to previous years. It has reached to 10.38 billion pounds which
is less in comparison to other years. But the company focuses on its digital
technology, and website which allows them to overcome this problem.

The current state of the automotive
industry
◦ Retail industry of US has amounted of 4.06 trillion dollars in the year
2020 which is higher in compare to previous years. Operating business
in this industry provides opportunities for purpose of Marks and Spencer
as they can sell its products to its target customers and earn more profit.
◦ Retailing industry of USA is earning high profit which is creating
opportunities for Marks and Spencer. The retail industry consists of
different companies which sell different products and services of
consumers.

Yip Framework
According to Yip model, there are different global drivers which are mentioned
below:
◦ Cost: Marks and spencer is an organization which has raise it minimum pay to
around £10 and 11.25 £ for around 4000 staff members. It will result in increasing
cost and in order to overcome of it, business needs to introduce change in their
organization.
◦ Government support: Government of UK is providing support to businesses
operating in their country to expand its operating in the international market. It
allow Marks and Spencer to attain growth in the marketplace by taking advantage
of different government policies. Government is giving different tax deduction and
subsidies to business which is important to reduce cost.

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◦ Competition: There are different competitors of Marks and Spencer like H&M, Zara and others.
All these are adopting digital technologies and focusing on increasing the sales and marketing
share of their organization. During the time of the Pandemic, these competitors have increased
their revenue where Marks and Spencer have decreased their revenue. This organization is
earning 10.38 billion pounds in the year 2019 which is less in comparison to previous years.
◦ Market: Any change in market also leads to change in the organization. There is boom of digital
technologies and online platform in the market. Marks and Spencer is also working over digital
technologies of company which helps firm to increase its revenue in the year 2022.

PESTEL analysis
Political factor:
◦ There are different rules and regulations imposed by the US government over a business that
creates an impact on the offering of a firm. Government of UK and USA impose regulation in
context to import and export regulations, covid-19 regulations and others.
◦ USA government also provides support to international business which creates an opportunity
for the business of Marks and Spencer.
Economic factor:
◦ Wages rate in the USA is also high which will also create a threat for businesses as it increases
the cost of the company. It is an organisation that has cut its staff by 2% during the crisis.
◦ Due to the recession, the ability of companies to offer discounts is also affected and due to
this, it is reduced by 20%.

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◦ Social factor: In the USA, customers are likes to wear clothes according to fashion trends and other
things. It creates an opportunity for the business of Marks and Spencer as it allows them to attract these
people by selling their trendy clothes. Due to credit card, there is also increase in trade of credit card
which is of 10%.
◦ Technological Factor: USA is a developed country that has various advanced technology. It provides an
opportunity for the business of Marks and Spencer as they can easily access these upgraded technologies.
It also creates a threat for business as there are different hackers who can access to data of the company.

Porters five forces model
◦ Competition inside the industry: There is increasing
competition in the retail industry which creates threat for
the business of Marks and Spencer. These competitors
are Zara, H&M, Asda, and Lawson. Therefore, there is a
high threat of this factor in business.
◦ Threat of new entrants: It is difficult for new entrants to
enter in the retail industry to compete with strong
marketing players like Marks and spencer. So, there is
low threat of this factor for business.

SWOT analysis
Strength
◦ Marks and Spencer is a multinational organisation that is offering high-end value products to its customers. It has a clear
image in the marketplace. It is operating for 136 years and also has 1463 outlets in different parts of the world.
◦ It is adopting diversity in the organisation as it is not limited to clothing but also offers home care products and also food
products to its customers. On basis of this diversification, it is earning a profit of 27.4 million pounds.
◦ Weakness:
◦ It is an organisation which has expanded its operating in international market but still it is not success in foreign market like
Asia and middle east.
◦ Marks and Spencer has poor scalability in the supply chain and for this, the business now focusing on providing its products
to an online platform to different customers globally.

Recommendations
In the context to chosen market, it is recommended to the business of Marks and Spencer to run their business according to current fashion trends. People of
the USA like to wear trendy clothes and in order to get success in this business, Marks and Spencer needs to adopt different market trends in the market.
◦ Advantage: It is one of the important components for businesses that create an advantage for business by creating huge demand and also to increase sales
of the company.
◦ Disadvantage: One of disadvantage of using this is that trends in the marketplace change constantly due to which fresh stock of company turned
untrendy in less time. It will also increase the cost of the company.
It is also recommended to businesses of Marks and Spencer to adopt digital marketing for purpose of selling their products and service. There is increasing
trends of digital marketing in today’s world which also solves the problem of the company related to the supply chain.
◦ Advantage: It allow Marks and Spencer to reach to numbers of customers in less time and also helps firm to increasing awareness of its products and
service.
◦ Disadvantage: Using this strategy can create a negative impact over the profitability of the firm as it increases the total cost of the firm.