Analysis of Marks and Spencer's Romanian Market Entry via Franchising

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Running head: RESEARCH REPORT
Marks and Spencer using Franchising to Enter into Romanian Market and the Impact on
Its Profitability

RESEARCH REPORT 2
Abstract
The main aim of this research is to assess the Marks and Spencer using franchising to
penetrate into Romanian market and the impact on its profitability. There are different
chapters in this research such as introduction, literature review, research methodology, data
analysis and findings, and conclusion and recommendation part. Under the introduction
chapter, the researcher describes the background of research, aim, and objectives, and
significance of the research. It also illustrates the research questions that would be responded
during the investigation. In a literature review, the researcher will describe the information
gathered through existing sources such as journal articles, textbooks, and online publication.
Under the research methodology section, the researcher will use different philosophies,
approaches, strategies, and sampling techniques. Interpretivism research philosophy and
inductive approach are used in this research. Along with this, a simple random sampling
technique is selected for choosing the sample on a random basis. It is addressed that the
statistical technique is selected for assessing the data. Under data analysis and findings, the
researcher assesses the gathered data and presents through different charts and graphs.
Findings are supported by the literature review. In conclusion and recommendation part, the
researcher has concluded all chapter and provides a recommendation on the basis of
conclusion.

RESEARCH REPORT 3
Table of Contents
Title:...........................................................................................................................................1
Abstract......................................................................................................................................2
Introduction................................................................................................................................4
Research aims.........................................................................................................................4
Research Questions................................................................................................................4
Research Objectives...............................................................................................................4
Background of Company........................................................................................................5
Significance of study..............................................................................................................5
Literature Review.......................................................................................................................5
Globalisation...........................................................................................................................5
Different entry modes.............................................................................................................6
Specific entry mode chosen by Marks and Spencer...............................................................7
Macro environmental analysis of Romanian country.............................................................7
Research methodology.............................................................................................................13
Introduction..........................................................................................................................13
Research Philosophy............................................................................................................13
Research Approach...............................................................................................................14
Research Choices..................................................................................................................14
Techniques and procedures of data collection......................................................................14
Sampling Methods................................................................................................................14
Data analysis.........................................................................................................................15
Access Negotiations.............................................................................................................15
Research limitations.............................................................................................................15
Ethical issues........................................................................................................................16
Costs.....................................................................................................................................16
Gantt chart............................................................................................................................16
Findings and analysis...............................................................................................................17
Conclusions..............................................................................................................................25
Recommendations....................................................................................................................26
Reflection.................................................................................................................................26
References................................................................................................................................28
Appendix: Survey through questionnaire.................................................................................30
Table 1: Gender........................................................................................................................18
Table 2: Age Group..................................................................................................................18
Table 3:Experience...................................................................................................................19
Table 4: Globalization has grown due to advances in transportation and communication
technology................................................................................................................................20
Table 5: In the developing countries, globalization is an important process due to the
immense benefits provided......................................................................................................21
Table 6: Globalisation has increased the production of goods and services............................22
Table 7: Modes of entry has been practised by organization to operate the business.............23
Table 8: Marks and Spencer use Franchising method to enter into new market.....................24
Table 9: Macro environmental analysis could help to Marks and Spencer for evaluating the
country situation.......................................................................................................................25
Chart 1: Gender........................................................................................................................18

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Chart 2: Age Group..................................................................................................................19
Chart 3: Experience..................................................................................................................20
Chart 4: Globalization has grown due to advances in transportation and communication
technology................................................................................................................................20
Chart 5: In the developing countries, globalization is an important process due to the
immense benefits provided......................................................................................................21
Chart 6: Globalisation has increased the production of goods and services............................22
Chart 7: Modes of entry has been practised by organization to operate the business..............23
Chart 8: Marks and Spencer use Franchising method to enter into new market......................25
Chart 9: Macro environmental analysis could help to Marks and Spencer for evaluating the
country situation.......................................................................................................................25

RESEARCH REPORT 5
Introduction
In the current business atmosphere, it is effective for the firm to enhance its business to
contest with market players as well as increasing growth of the global marketplace. In this,
evaluation of global business atmosphere is effective to obtain higher success in the
marketplace due to actually understandthe condition of the market. It could be effective in
evaluating market players’ position, as it would support to enter into a new marketplace.
Marks&Spencer could deeply comprehend different methods for entering into the global
market and getting higher profitability (Hoffman, Munemo, and Watson, 2016).
Research aims
The main aim of this study is to evaluate the franchising method to enter into Romanian
market and its impact on the profitability of Marks and Spencer.
Research Questions
 What is the meaning and concept of globalization?
 What are the different entry modes for entering into a new market?
 What are specific entry modes chosen by Marks and Spencer to enter into Romanian
market?
 What are the macro environmental analyses of the Romanian market?
Research Objectives
The following objectives will be accomplished to meet the aim of the study:
 To explore the meaning and concept of globalization
 To comprehend the different entry modes for entering into a new market
 To explore the specific entry modes chosen by Marks and Spencer to enter into the
Romanian market
 To analyze the macro environmental analysis of the Romanian market

RESEARCH REPORT 6
Background of the Company
Marks & Spencer Groupplc is a retail organization as it delivers many services to their
specified consumers. This organization has located in Westminster, London that delivers
home products, clothing, and luxury food goods and services. It is listed in LSE and FTSE
100 Index. It could be effective for the attainment of the organizational task.
Significance of the study
This study is effective for gaining an understanding of the researcher towards the meaning
and concept of globalization. In this, the investigator has gained their understanding with
respect to different entry modes for entering into a new market. In this, the researcher has
also been capable to evaluate the specific entry modes chosen by Marks and Spencer to enter
into Romanian market. From this study, the reader can deeply evaluate the macro
environmental analysis of the Romanian market (Madanoglu, et. al., 2017).
Literature Review
Globalization
According to Hoffman et al. (2016), globalization is the procedure through which, individual,
ideas, as well as goods allocated by the globe, urging more integration as well as integration
among the culture at world level, government as well as economies. Along with this,
globalization has increased because of advanced communication and transportation
technology. With the gained global communication, international trade, culture, and ideas are
increasing. Under the developing nations, globalization is a significant procedure because of
offering wider advantageous.
In contrast to this,Madanoglu et al. (2017) evaluated that globalization is beneficial for the
overall economic growth of the nation by foreign investment triggering saving within the
nation that can be practiced in other investment. It is the procedure through which, global is

RESEARCH REPORT 7
increasingly linked as a consequence of tremendously gained trade with cultural exchange.
Along with this, globalization has gained production related to goods as well as services.
Different entry modes
As per the view ofKumarAnandand Song (2017),there are different entry mode strategies for
penetrating into the international market. Exporting is a direct selling and marketing of
locally produced goods in another country. This approach is a traditional and deep-rooted
method for arriving at international markets. Since exporting does not entail that the products
be manufactured in targeted countries hence, no outlay is essential for international
production services. Moreover, a high amount of costs associated with exporting is created in
the field of marketing operating costs. There is coordination between different competitors
exists for exporting the goods and services like importer, government, exporter, and transport
providers.
On the other side, KruesiKimand Hemmington (2017) illustrated that licensing permits the
company in the target nation to use the property related to the licensor. Moreover, these
properties can be organized in intangible manners such as patent, production, and trademarks
tools. Under such strategy, the licensee can pay a fee in against for right of entry in intangible
property and probably for technical assistance. Because there isa low investment is essential
from the side of licensor hence licensing can feasible method for providing the high amount
related to return on investment. However, it is assessed that licensee manufactures and
markets the products and services, therefore, there are chances of obtaining the low return
from market and manufacturing practices.
As per the view ofKashyapand Murtha (2017), franchising system is a key technique in
which, franchisees pay feeds as well as royalties to franchiser in exchange related to the right
to become an owner with using trademarks, trades for its products and services, and using
business set-up, as well as structures. The key benefits of global franchising method are low

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political uncertainty, low expenses as well as allows the simultaneous growth into a different
nation at the global level.
Specific entry mode is chosen by Marks and Spencer
According toGrimpe et al. (2017) franchising is a kind of business association where parent
company provides franchising possibility in the target market in which, it wants to initiate its
business. In such kinds of business association, the parent company can allocate the right of
market and distribution of its products and services to an independent company such as
franchisee.
On the other side, Jell-Ojoborand Windsperger (2017) evaluated that there is key
advantageous of this technique of market entry is that a company will be competent for
generating the availability of its business in the new marketplace without additional financial
issues. The franchising is good to approach for choosing the talented business professionals
as per the historical business locations and performances. The franchising business approach
can reduce growth uncertainty.
Macro environmental analysis of Romanian country
Political factor
(Sources: The global economy, 2019)

RESEARCH REPORT 9
As per the above chart, it can be illustrated that in Romanian, there is low political stability
because it will have a positive impact on Marks and Spencer in Rome. Company will have a
chance to enhance its practices and approaches to decline the impact of taxation on trading
without breaching the rules. But, public health strategy would tend to discourage an
individual for consuming high-fat products and services. Along with this, Marks and Spencer
will have the chances of dealing with external concerns by improving the quality of products
and services.
Economic factor
Inflation rate
(Sources: The global economy, 2019)
Unemployment rate

RESEARCH REPORT 10
(Sources: The global economy, 2019)
GDP per capita
(Sources: The global economy, 2019)
Ease of Doing Business in Singapore

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(Sources: The global economy, 2019)
According toJell-Ojobor and Windsperger (2017)inflation rate is increasing as compared to
the previous year in the year of 2017. Along with this, the unemployment rate is declining as
compared to earlier periods. It is also addressed that GDP per capita is increasing in Romania
as compared to previous times. In Romania, Marks and Spencer have chances to spread their
business due to the ease of doing business. The current economic condition in Romania can
influence business development in this country. Moreover, the sluggish market of Romania
can hamper the growth of a business.
Social factor
Romania Consumer Spending

RESEARCH REPORT 12
(Sources: The global economy, 2019)
According toGrimpe et al. (2017),consumer spending is increasing as compared to previous
years in Romania. Marks and Spencer have the probabilities for growing their business as the
company targets the customers highly from medium and low-income households.
Consequently, it has chances for improving its product mix because of influencing the more
diverse target market. The modern and healthy lifestyle trend could be a threat to business as
different retail companies are criticized for their adverse health impacts. However, Marks and
Spencer have the chances of improving their product quality.
Technological factor
Romania Competitiveness Index