Marks and Spencer: Managing International Trade in the Japanese Market

This report provides an in-depth analysis of Marks and Spencer's (M&S) international trade strategy, specifically focusing on its expansion into the Japanese market. The introduction highlights the significance of international trade, its impact on company performance, and the factors driving its growth. The report then provides background information on M&S, detailing its business model and product offerings, and on Japan, emphasizing its economic and political environment. The core of the report analyzes key trade issues that M&S would face, including import licensing, innovation, and cultural differences. It examines the importance of import licenses for various product categories, the need for innovation to meet consumer demands, and the impact of cultural norms on business practices. The report concludes by summarizing the challenges and opportunities for M&S in the Japanese market, emphasizing the need for strategic planning and adaptation to succeed in international trade. The report also includes a reflective essay discussing the student's insights and learning from the assignment.

Managing
International Trade

Table of Contents
INTRODUCTION..............................................................................................................1
BACKGROUND INFORMATION OF COMPANY AND ECONOMY................................2
Background to Marks and Spencer.................................................................................2
Background to Japan....................................................................................................... 3
Analysis of Key Trade Issues...........................................................................................1
CONCLUSION................................................................................................................. 6
REFLECTIVE ESSAY......................................................................................................7
REFERENCES.................................................................................................................9

INTRODUCTION
International trade is one of the important aspects contributing towards exchange of
capital, goods and services across the international borders. Mainly, this type of trade leads to
rise in the economy of a nation through cost or demand and supply directly affected by the
global events. This tends to directly impact upon the performance of a company which operates
its business in another country. Along with this, it includes the process of buying and selling of
products and services in different countries so as to facilitate easier flow of goods and capital
from one place to another and foster the growth of world economies (International Trade, 2017).
In simple words, this can be referred to as importing and exporting. It also accounts for a
significant part of GDP of a nation. GDP refers to the sum total of market value of the products
and services manufactured within a specific time frame, which is usually ascertained to be
annual. With the assistance of this, an organisation can easily conduct their activities as well as
operations within foreign market. This helps the firm to easily gain competitive advantage in
global trade.
Over a period of last few years, international trade has seen a rapid growth. There are
various factors which are believed by authors and academicians to significantly contribute
towards it. These comprise of adoption of latest tools and technologies and globalisation of
markets in order to fulfil needs and demands of consumers and to make sure that multinational
corporation are able to carry out business growth and expansion. Further, the emergence of
global organisations like GATT, WTO, World Bank and other such institutions ensure the
facilitation of free trade among the countries and assist in faster growth of international trade.
These entities are responsible for liberalising the trade barriers and protection barriers which
hinder the inter-country trade.
Present report is based on Marks and Spencer which is a famous British multinational
retail company specialising in selling of clothing, home products and luxury food products to
customers. Marks and Spencer is planning to expand their business in Japan with the purpose
of targeting new market. Being a developed and market oriented economy, company has
selected Japan as the target market. This has been done to easily increase their market share
and also attain success in near future. This report includes background of company and the
economy where they intend to expand their business. Along with this, analysis of key trade
issues is mentioned in project which would be faced by the company in the specific country.
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BACKGROUND INFORMATION OF COMPANY AND ECONOMY
Background to Marks and Spencer
Marks and Spencer is a multinational retailer company situated within London which
specialises in segments such as clothing, luxury food products and home products. This
company was found by Michael Marks and Thomas Spencer in 1884 in Leeds. This enterprise
has around 979 stores in UK inclusive of 615 which only sell food items to customers. The main
focus of this organisation is to expand their business and increase its share in marketplace with
the target of attaining success by providing best quality products and services. In context of
Marks and Spencer, the company intends to expand their business in Japan with the aim of
establishing their competitive brand image and position in the minds of customers prevailing
within this nation.
Marks and Spencer has a vast variety of goods within every outlet that assists the
customers in choosing the best products as per their needs, demands and accords. For
instance: In vegetable category, M&S initiated selling of fruits and vegetables around 40 years
back. The belief of company had always been to maintain healthy relationships with farmers in
order to procure fresh products from them. At present, Marks & Spencer has contacts with over
1200 suppliers to provide 400 different varieties of goods as well as 500 types of vegetables
and fruits.
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Background to Japan
Japan is a highly developed economy which is largely market-oriented and supports the
growth of businesses which are operating and functioning as an important part of this nation.
The main reason behind selection of this country for expanding the operations of Marks &
Spencer is that its GDP and political factors are effective which may and facilitate the provision
of efficient support to business organisations to formulate expansion of their business activities.
Business environment refers to the combination of internal and external factors which
directly impact upon the overall performance of a company. In this regard, business
environment consists of political, economical and social factors which together have an
immense influence upon the operations as well as functioning of business. In this regard, Japan
is the fourth largest nation by purchasing the power parity. This is the main reason behind
Marks and Spencer selecting this nation to expand their existing business in order to increase
their current global market share (Dai, Maksimov, Gilbert and Fernhaber, 2014).
Japan is a constitutional monarchy which has limited political affairs. Also, this country is
in close relationship with US. Along with this, Japan also put a lots of efforts with the purpose of
building as well as maintaining better relationship with other countries such as UK, France,
Australia (Enloe, 2014). As the political restrictions within this nation is low, Marks and Spencer
can easily accomplishing their positive brand image. Besides this, Japanese economy is
immensely strong which has a positive impact upon the companies that expand their business
in this country. Japan is the third largest economy in the world with a total in terms of GDP of
approx $4.9 trillion. It has mixed economic system which provide lucrative opportunities for the
company to improve their market image. In this regard, Marks and Spencer can easily expand
their business in Japan to enhance their market share by fulfilling the needs and demands of
consumers. Furthermore, the current Japan corporate tax rate is approx 30.86% but recently
government has approved a plan for reducing the tax rate to 20% for companies. This tends to
provide opportunity to Marks and Spencer to establish their image at this marketplace.
Japan is 10th ranked populated country in the world (Haggard and Kaufman, 2018).
Along with this, number of people in Japan prefer Japanese company. It negatively impacts on
foreign companies because it make training process more difficult. This is the main reason that
many foreign companies have failed in establishing their business in Japan (Trevino and
Nelson, 2016). Thus, it is important for Marks and Spencer to carry out a detailed environmental
scanning before establishing their business in Japan. Middle class segment within Japan is
stable in nature which is beneficial for the business organisation that wants to operate its
business in this country.
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(Source: GDP OF JAPAN, 2019)
Japan has one of the most advanced telecommunication systems across the globe.
Mainly, it uses modern technologies in every field. Thus, it is important for Marks and Spencer
to make use of advanced technologies within their activities so as to ensure smoother working
in this country (Rodan, 2016). For example, automation is a technique which is highly used by
business organisations within Japan. It provides great opportunities for companies like Marks
and Spencer to tap advantage of this technique and bring innovative products in Japan to gain a
competitive advantage over rivals.
Japan is a clean and environmentally responsible country, however, it faces issues
related to environment like waste management. Along with this, it is also get affected by natural
disasters such as earthquakes, floods, cyclones and many more which negatively impacts upon
those companies that want to expand their business in Japan. All the above mentioned
elements play an important role in analysing the business environment within Japan. By taking
these into consideration, Marks and Spencer can easily expand their operations in Japan with
the aim of attaining competitive advantage.
In every respect, Japan is the most advanced country that provide opportunities to
companies to enhance their market share. Furthermore, it is a high-tech country which
specialises in production process as it is heavily dependent on exports. Marks and Spencer is
operating their business within retail industry which is a highly developing and growing sector
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Illustration 1: GDP OF JAPAN (figures in billions)

which demonstrates that there is a vast scope for company to facilitate international trade by
carrying out expansion within Japan.
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Analysis of Key Trade Issues
International trade refers to exchange of services, products and capital across the
international borders. Trade is relative cost of import in context of export and it is explained as
cost of export ratio. Under this, trade issues are dominating and also continuing international
theme. For instance: Child labour, sanctions, global market etc. There are wide range of
strategies for entering in Japanese market. When one company is developing its business in
another country for the purpose of business expansion, it faces many issues. It is necessary
that firm should be aware about the policies and strategies of new country (Deardorff, 2014).
Regulatory, culture and some of the other non-tariff issues to entry in market as well as
sustainability exist. In addition to this, Marks & Spencer is establishing its business in Japan to
enhance its market share.
Japan does not have non- tariff barriers that can affect on commercial activity through
delaying or impending import of foreign goods. Japan is one of the leading centre of innovation
and business. In Japan, starting business is not complex but expensive. There is critical
analysis of key international and business trade issues that impact on the decision making of
Marks & Spencer while entering Japan. The key trade issues that are highlighted in context of
M&S while entering Japan are import licensing, innovation, culture, standards etc. These are
elaborated below:-
Import Licensing- Under this, many products do not need any import license and they
can easily be imported to Japan. In context to this, import licenses are needed for some goods,
For instance: plants, perishable products, materials etc. License is also needed for goods which
are related to import quotas consisting of categories such as fish products. As Marks & Spencer
deals in retail sector so for importing, it is necessary to have license to facilitate easier
international trade (Saslavsky and Shepherd, 2014). Import is found to be a significant part of
international trade and facilitate movement of goods and services outside national boundaries. It
is ascertained that if M&S fails to obtain licenses for getting imports, this may lead them to harm
as per the regulations of Japan.
Innovation- In recent years, Japan has taken initiatives related to innovation in order to
ensure development of economy. The businesses within Japan are willing to undertake
innovation and want to incorporate unique and new specifications in existing products. In this
context, Marks & Spencer should conduct an investigation before establishing its business in
Japan to gain knowledge about demands and preferences of consumers. Innovation is the key
to economic success and if not adopted by the firm can lead to downfall of M&S within new
country. In order to effectively trade within Japan and ensure the sustainability of company, it is

essential for Marks & Spencer to indulge in innovative practices and procedures at regular
intervals as this is a key component of corporate culture of Japan.
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Culture- It means the norms, values, principles, beliefs etc. which need to be followed.
The culture of every country is different from the each other. The relationship in the business in
Japan country and it is necessary to show right respect level and also be polite at all the times.
When handling any types of business relation, it is necessary that company have patience and
observe the local etiquette to develop products accordingly. Thus, Marks & Spencer will gain
knowledge about the culture of Japan and provide training to staff members.
Standards- Imported good have to undergo product testing and also firms can not sell in
Japan without any certification. Without any kind of certification, Japan will not allow M&S to sell
products. In addition to this, compliance with the standards as well as regulations is governed
through effective certification system (Deresky and Christopher, 2015). Additionally, Marks &
Spencer will use quality tools like Total quality management which helps in reducing the defects
and eliminating the wastages.
These all are the main issues which Marks & Spencer will have to face while conducting
business operations in Japan.
Opportunities
On the other hand there are some benefits which firm can get in establish business in
Japan country. From these issues, firm face some risks along with capture the better
opportunities in the international trade (Gilpin, 2016). There are some opportunities as well as
risks from the discussed issues as mentioned below:-
 License is necessary to import and export of products from one country to the another.
License provides by the government to legally conducting the transportation activities in
a better manner. From this, there is an opportunity to Marks & Spencer to import its
products by using the import license in business. It can be helpful in capture the large
market share and also can establish its business sin the Japan without face any issues.
 Innovation is helpful for company to make some unique which are not exist before. With
the help of innovation, firm can success at market place and also can compete with its
strongest competitors in competitive market. If Marks & Spencer company will make
some innovation in its products by knowing about needs of customers then it will be
helpful in target the new market share and also gain the attention of consumers at
market place. For facilitating innovation, firm can adopt new technology and through this
it can make changes to attract customers (Gilpin, 2018).
 Culture impacts on the business a lot. It is necessary that company should be aware
about the culture of Japan so that it can not face any complexities in establish or
conducting business. Awareness about the culture of different country is necessary. For
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this, Marks & Spencer firm should provide the training to its staff members about the
etiquettes, business culture etc. On the other hand, Marks & Spencer can make the
better connection with the local people so that they can get knowledge about the all
things (Winham, 2014). From this, company will get better opportunity to perform its
business operations in Japan without any kind of interruption. It will be helpful in capture
the new target market and enhancing its business growth. It will help in provide the
benefit to an economy.
 Quality plays an important role in business. In this present time period, each person
wants to better quality of products. In Japan, government set some quality standards
that need to be pass by the firms. So, by using the Total Quality Management, Marks &
Spencer business firm can improve its quality and also provide the better quality of
products to people of Japan for enhancing its sales.
Risks
 Under the import license, if company will not have any license to import the goods in
Japan then it can face many issues and also will not able to import products. It will be
risk for firm because it can not import the products. In order to make the license, there
should be permission of government and company need to be taken.
 Innovation makes the business more effective and but if the employees are not able to
make innovation in its business then in this case firm can not be satisfy neds of
consumers.
 Culture impacts on business and the culture of every country is varied from the each
other. If firm will not be aware about the culture of Japan then it will not able to perform
its business activities at market place of Japan (Deresky, 2017). It will develop a risk on
business of Marks & Spencer company.
 Quality is a necessary component and for consumers it is more important. If firm will not
focus on the quality improvement then customers will not be interested towards
purchasing the products of Marks & Spencer. It will be develop the negative impact on
international trade of business firm.
Trade creation
Theoretical perspectives
Trade creation is economic concept that is related to the international economic under
which the flow is redirected because of development of free trade. It occurs because of joining
customs unions in order to minimizing protectionist policies for an instance trade barriers, tariffs,
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reducing the low taxes that will help in minimizing cost of services as well as products. It
consists wide range of taxes. Trade treaty that consists the investment guarantees. Related to
the trade, there are some issues faced by the other country. In order to make the trade with
Japan, United Kingdom should be agree with terms and conditions of that country. From this,
consumers can not switch the product and manufacture high quality of products.
Opportunities and risks
For the different stakeholders, there are some opportunities. The main opportunity is
related to minimum cost products.
 Customers of Japan can get the products on the low cost. Minimum price is helpful in
enhancing buying power of consumers as well as make improvement in affordability.
 There has an opportunity for United Kingdom that it can expand its products as well as
services in the market of Japan. It can not face any issue related to protectionist and
tariff measures for an instance quotas.
 In the trade deals, if Japan country will agree to deal with the other country then it will be
helpful in enhance and economy as well as market share of home country.
Risk related to trade creation as well as custom union is that government of Japan would
minimize tax revenue from the import tariffs. It develops the main risk for the local producers to
out from the business.
Impact on managers
Management of Marks & Spencer company face many challenges at the time of
operating business in environment of Japan. Business expansion is helpful for firm to enhance
sales, gain high profit, create trade business opportunities and many others. In addition to this,
manager of Marks & Spencer should set the effective and beneficial distribution along with
marketing related strategies that will helpful in generate more revenue and gain the market
share.
Comparative advantage and Heckscher-Ohlin model
Theoretical perspective
Heckscher-Ohlin model is related with the arguments towards the laws of comparative
advantage. Thus, it is important for country to ficus on the overall production and export of the
services. This type of theory can help county to attain comparative advantage.
Opportunities and risks
It is opportunities for the Japan as the Marks and Spencer can easily operate their
production activities. This will help in creating number of employment opportunities for the local
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people an workers as well. Mainly, it create the win-win situation in which workers can easily
enhance their skills and knowledge which directly contribute in enhancing the chances of
attaining success at Japan market. In addition of this Marks and Spencer needs to keep their
product price low in Japan market so that they can easily increase their market share.
Impact on manager
It is important for manager to effectively handle the risk factor that may help in improving
the overall performance of the company at Japan market. In this they use quality control
procedures to eliminate the wastage of the products that negatively impact on the quality of the
products. Along with this, the also ensure about the workers needs at workplace. For attaining
positive outcomes, company needs to provide better training and development programs to their
workers so that they can easily perform their best and also meet customers needs and wants.
Protectionist policies
Theoretical perspective
It is an economic policy that restricting the imports from the other countries by different
methods like import quotas, imported products and different regulations of government. This
kind of issue develops the short term impact on an economy of Japan. The main aim of develop
this policy is to protect industries at domestic market place which can not be compete with
international rivals. In context to this tariff is one of the protectionist measure that helps in act as
import duty and its result in enhance in cost of goods and services.
Opportunities and risks
If the tariffs are need to be introduced on the Japanese products the it would introduce
its tariffs and also provide an effective opportunity for government of China to earn the revenue
of tax. On the other hand, through using this policy, Japan country can enhance wages of the
domestic wages. Protectionism is helpful in develop the jobs to workers and it permits the home
country to hire the employees.
The risk related to Protectionist policies is that it will loose international competitiveness
as tariff results. Through this, products of Marks & Spencer will be expensive. The other risk
from the Protectionsm is that there will be limited choice to consumers regarding the services
and products. On the other hand consumers will pay more to products.
Impact on manager
In this manager of Marks and Spencer needs to evaluate all the situation related with the
protectionist policies. In this management of the company influence the terms of speaking
towards the policy maker which contribute in shaping the future opportunities in Japan market.
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CONCLUSION
From the above mentioned report, it has been concluded that international trade is the
way of exchanging goods and services in across the borders. Mainly, this process used by
those companies who wants to operate their business in another countries with the aim of
attaining success. As Marks ad Spencer wants to expand their business in Japan because it is
developed country which provide various opportunities to the company to increase their market
share. In addition of this, company needs to evaluate all the issues that can be occur at the time
operating their business in another country. This will help them in establishing positive brand
image at market place.
In addition of this, for enhancing the market share and growth it has been recommended
that Marks and Spencer needs to effectively evaluate the external business environment of
Japan before expanding their activities. This may support them in capturing future opportunities
in market. Along with this, company required to evaluate the Japanese customers behaviour so
that they can easily provide the quality services accordingly. Effective trade deal is also required
for the Marks and Spencer in which they needs to analyse the trends of market and norms
because it is not necessary that every products of Marks and Spencer is sell in Japan. With the
assistance of this, company can analyse the whole market for implementing their activities in
Japan market in most effective manner and also increase the chances of establishing their
competitive image.
REFLECTIVE ESSAY
It is a tough challenge to get involved in a task that needs constant input from
individuals in terms of their application of effective knowledge as well as utilisation of a number
of concepts which are together essential for carrying out the work efficiently. The first step while
starting this assignment was to gain an insight into and analyse the topic under study. This
helped me in gaining appropriate knowledge about the manner in which the project was to be
executed so as to ensure that the work reflected the application of concepts and theories
learned within lectures and throughout the module. Besides this, at each step of the study
carried out in respect of the project, it needed adequate and effective working as well as
analytical skills for me so as to determine whether the information collected for completing the
project was valid and reliable or not. Further, the execution of project in the desirable manner
desired input from me in terms of application of a number of characteristics, attributes and traits
of my personality so as to remain confident that the content written in my project was aligned
with the required learning outcomes. Also, what else needed to be ensured was that whether
the subject that I chose for carrying out the study fulfilled the requirements and needs of module
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content. To write content upon a vast concept that was a composite of a number of factors and
aspects required courage, hard work and dedication so as to make sure that I deliver
performance as per the requirements of project. During the research conducted for completing
this project, I learned various new concepts, ideologies and views which assisted me in further
developing my knowledge for the specified topic under study.
It was challenging for me to gain information and statistical data about certain aspects
associated with the project and thus, I gained a deep insight into the books and journals which
were related to my research and topic under analysis. These books and journals contained view
points, thoughts, opinions and perceptions of a number of authors and academicians which
assisted me in clearing my doubts at some instances and developing my existing level of
knowledge and skills at some other instances. Still with my constant outputs and appropriate
application of observatory and analytical skills using quantitative and qualitative research
methods, I was able to successfully execute the project within the stipulated time frame by mu
tutor. In future context also, I will be willing to undertake any opportunity that would make me
work upon any topic which would assist me in expanding my existing knowledge base and
working towards effectively perform the given challenging task. I think my perseverance,
patience, dedication and hard work would assist me in giving my full outputs for the successful
completion of my project.
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REFERENCES
Books and journals
Gilpin, R., 2018. The challenge of global capitalism: The world economy in the 21st century.
Princeton University Press.
Deresky, H., 2017. International management: Managing across borders and cultures. Pearson
Education India.
Winham, G.R., 2014. International trade and the Tokyo Round negotiation (Vol. 463). Princeton
University Press.
Gilpin, R., 2016. The political economy of international relations. Princeton University Press.
Deresky, H. and Christopher, E., 2015. International management: Managing cultural diversity.
Pearson Higher Education AU.
Saslavsky, D. and Shepherd, B., 2014. Facilitating international production networks: The role of
trade logistics. The Journal of International Trade & Economic Development. 23(7).
pp.979-999.
Deardorff, A. V., 2014. Terms of trade: glossary of international economics. World Scientific.
Van den Berg, H., 2016. Economic growth and development. World Scientific Publishing
Company.
Scherer, A.G. And et. al., 2016. Managing for political corporate social responsibility: New
challenges and directions for PCSR 2.0. Journal of Management Studies. 53(3).
pp.273-298.
Ross, D. F., 2015. Distribution Planning and control: managing in the era of supply chain
management. Springer.
Haggard, S. and Kaufman, R. R. eds., 2018. The politics of economic adjustment: international
constraints, distributive conflicts and the state. Princeton University Press.
Trevino, L. K. and Nelson, K. A., 2016. Managing business ethics: Straight talk about how to do
it right. John Wiley & Sons.
Rodan, G., 2016. The political economy of Singapore's industrialization: national state and
international capital. Springer.
Enloe, C., 2014. Bananas, beaches and bases: Making feminist sense of international politics.
Univ of California Press.
Dai, L., Maksimov, V., Gilbert, B. A. and Fernhaber, S. A., 2014. Entrepreneurial orientation and
international scope: The differential roles of innovativeness, proactiveness, and risk-
taking. Journal of Business Venturing. 29(4). pp.511-524.
Online
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International Trade. 2017. [Online]. Available Through:
<https://www.thebalance.com/international-trade-pros-cons-effect-on-economy-
3305579>.
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