Strategic Marketing Report: Analyzing M&S's Austrian Market Entry

This report offers a comprehensive strategic marketing analysis for Marks & Spencer's (M&S) potential entry into the Austrian market. The report begins with an introduction to strategic marketing and an overview of M&S. It then delves into a detailed PESTLE analysis, examining the political, economic, social, technological, legal, and environmental factors relevant to M&S's expansion. The core of the report critically assesses three market entry modes (licensing, joint venture, and franchising), recommending franchising as the most suitable option. The report then applies concepts of market segmentation and targeting to evaluate the potential target market for M&S in Austria, followed by an application of Porter's generic strategies to determine how M&S can gain a competitive advantage. The report concludes with a summary of key findings and recommendations, providing valuable insights for M&S's strategic decision-making process.

Strategic Marketing

Executive Summary
Strategic marketing relates to a critical analysis system which affects a firm's work on
different potential factors. To improve their productivity and broaden their market share, these
tactics are essential for companies. The main agenda of the file is to know about Strategic
Management in detail which can help business organisation to do proper planning and plotting
for accomplishing the goals of an organisation. Here, PESTLE will help to determine about each
and every external factor which can guide that how any of the company is needed to perform by
looking at the external factors as they are very crucial. Secondly, detail knowledge about the
process of entering into the new market can be crucial because it will help business organisation
to do planning and plotting. Market Segmentation and effective use of Porter’s generic model
can be crucial because it will help company to achieve the long term objectives.
Table of Contents

INTRODUCTION...........................................................................................................................4
OVERVIEW OF THE COMPANY................................................................................................4
MAIN BODY...................................................................................................................................4
PESTLE analysis....................................................................................................................4
Critically assess three modes of market-entry that could be suitable to your client. Out the
three options, make a recommendation with justification as to the most appropriate one.....7
Applying the concepts of market segmentation and targeting critically evaluate the potential
target market of your client....................................................................................................9
Applying Porter’s generic strategy, explain how your client could gain competitive advantage
by adopting one of the generic strategies in your recommended market.............................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Strategic marketing is the process of planning, developing and implementing marketing
tools and techniques so that a large number of customers can be attracted towards the company
products and services so that competitive advantage can be achieved. It is a long-term forward-
looking approach with the fundamental goal of achieving sustainable growth in the competitive
market. Marks and Spencer Group plc is a British retailer company which deals in high quality
clothing, home products and food products. The headquarters of the company are in London,
UK. The company is thinking about introducing shoes as their new products to be offered to
customers in market of Austria. This report is based on the marketing strategies that should be
used by the company so that competitive edge can be gained in the market along with using
certain theories and frameworks. Also, PESTLE analysis will help them to understand that what
are the opportunities and what can be the biggest threat while expanding the business to new
place.
OVERVIEW OF THE COMPANY
Mark & Spencer is the famous company in UK which has been delivering the number of
services to their customers. It was established in the year 1884 and it headquarter is in London,
United Kingdom. In present scenario, it has been delivering its services throughout the world.
The founder of the organisation was Michael Marks and Thomas Spencer. Although, it is 135-
year-old company but still it is providing the services to its customers which they are expecting
from the company. Almost 80000 employees are working with the company which shows that
how successful this company is in present time (Chernev, 2018)
MAIN BODY.
PESTLE analysis
PESTLE analysis is a strategic management tool that is used by companies so that the
effects of external environment can be analysed which helps the company in formulating

strategies and policies that will help the company in dealing with the negative effects of the
external factors on the company. PESTLE analysis for Marks and Spencer in Austria is given as
follows:
Basis Definition Opportunities Threats
Political These are the laws and
regulations that exist in a
country and affects the
functions of businesses like
tariff rates, tax rates etc. For
illustration, a government
can introduce a new tax or
obligation that could alter
entire organizational
structures that generate
income (Banerjee, 2017).
Austria is a politically
stable country which
means that the rules and
regulations do not
change continuously
with changing
government which is an
advantage for M&S to
expand its business in
Austria.
Although rules don’t
changes in Austria but
tax rates are very high
i.e., 25% which will
increase the overall
expenses of Mark and
Spencer.
Economic Economic factors include a
major effect on business
that how it is
being conducted by a
company and how
successful it is. These are
the economic conditions of
the country like
unemployment rate, interest
rate, GDP etc.
The country has a well-
developed market
economy and the
standard of living is
also high. Also the
industrial sector is
sound which gives new
companies to expand
their businesses in
Austria (Hollebeek,
Conduit and Brodie,
2016).
There are number of
situation where
inflation rate, interest
rates changes and if in
any of the situation it
changes then it will
create lots of problem
for the company
because revenue will
decrease automatically
in it.
Social It is one of the most
important factor because it
tells that how any of the
The people of Austria
has high disposable
incomes which helps
The language, culture,
tradition and believes
are totally different

organisation is going to
perform in future period of
time by following the
ethical codes. These are
related to the demographic
combination of the country
like religion, culture, age
etc.
them in accepting the
products offered by
M&S which is
beneficial for the
company to introduce
its new product.
due to which it is not
that easy for the
business organisation
like M&S to start the
commercial activities.
Technological It is related to the extent to
which R&D is actively
done in the country and the
advancements in
technology (Kim, Shin and
Min, 2016). It is necessary
for any of the organisation
that they must try to find
that what market is demand
in upcoming product with
the help of new
technologies.
The government of the
country spend heavily
on technological
developments and also
support highly
advanced technologies
in the country.
The country is totally
dependent upon the
latest technologies and
internet facilities and
if in any of the
situation company
fails to meet the
requirement of
advance technology
then they might have
to suffer.
Legal These are the legal
frameworks and the laws
that prevail in the country
and affects business
functions. It is important to
understand if any of the
organisation doesn’t follow
the legal factor then lots of
penalties can be imposed
which can directly impact
Labour laws are very
strong in the country
and labour
organisations play an
important role in the
country economy. M&S
adheres strongly to all
the legal obligations
which helps it in
expanding its business
In country like
Austria, the penalties
for the breach of any
laws and regulations
are high due to which
it is necessary for
M&S that they must
comply with rules and
regulations and if in
case they fail to do so

on the long term
profitability of the
company.
in Austria
(McDONALD, 2016).
then legal charges can
be imposed on the
company.
Environmental These are the
environmental factors of the
country like availability of
water, temperature,
pollution etc. For any of the
organisation, it is crucial for
them to focus that they are
not allow to manufacture
any of the product by
harming the nature because
nowadays public are aware
about the nature and even
they prefer those product
which are manufactured
without harming the
environment.
The changing weather
conditions gives the
company an opportunity
to introduce new variety
of shoes so that they
can suite all kinds of
weather and can be
comfortable for the
people.
Here, company are
trying to introduce the
shoes product in the
market of Austria but
M&S is required to
give special focus that
they must not harm the
environment in any of
the situation and if
they fails to do so then
in that condition
customers will not be
attracted towards the
company.
Critically assess three modes of market-entry that could be suitable to your client. Out the three
options, make a recommendation with justification as to the most appropriate one.
Marketing entering strategy is one of the most important strategy for any of the business
entity because helps to determine each and every factor and how many of them are helpful and
how many of them can create the issues for public. If an organisation is not able to adopt the best
strategy, then they might have to suffer whenever they try to enter into new market. Suitable
form of entry into the market can be helpful because it will directly help to attract new customers
in short period of time (Aghazadeh, 2015)
. Also, company will get the opportunity to enhance their overall profit ratio and number of
customers towards the company. Mark & Spencer is needed to understand that if they would not
judge the suitable form of market strategy then they will have to suffer for longer period of time

for accomplishing the goals of an organisation. There are three different types of ways through
which company can enter into the new market and they are explained below in detail:
Licensing: It relates to the sale of intellectual property rights from one corporation to the
other in consideration for a certain fee. Such method is limited for earning income. This types of
way don’t allow for the proper exposure for the organisation which they want within the foreign
market. This approach may not be effective for M&S, as licensing has significant drawbacks for
the company at the time of introducing new product in the new market. Firstly, whenever
organisation takes the licence for any of the product then there are high possibility that
intellectual property of that company might be stolen. Also, there are high chances that company
forgets the clause of exclusivity to include. Even other company can obtain the licence due to
which there will be high chances that company might lose the control over the market(Shank and
Lyberger, 2014).
Joint-Venture: It is also one of the way through which company can enter into the new market.
Here, two or more than two company comes together for the purpose of performing business at
the greater platform. It is mainly done in the situation where company have the specific aim and
objective. If all entities have the very same aim and work at comparable levels, joint ventures
function well. This types of marketing entering process is mainly done by those firm which
perform at greater platform (Cross, Belich and Rudelius, 2015)
. While talking about the business organisation like Mark & Spencer, it would not be
suitable for them to comply with joint venture because they are going to enter into the new
country where they not conducted any of the business activity. So, it will be important for them
to find the ways that how they can reduce the overall cost and for joint venture will not be the
suitable one. Also, there is very less flexibility in joint venture business because multiple number
of organisation comes together to perform the business activities. Even there will high possibility
that dispute might arise between the business organisation.
Franchising: It is also one of the suitable option through which company can easily enter into
the new market with the help of forming contract. The contractual agreement take place between
two organisations and they are Parent Company and Host company. Here, host company have to
sell the product and services which are being given by the parent firm. This is one of the way
through which services are being delivered to the customers (Varadarajan, 2015). The main

benefit of franchising strategy is that helps to reduce the overall cost of any company through
which they can easily enter into the new market.
It can be concluded from the above discussion that organisation like Mark & Spencer
must try to adopt franchising process for entering into the market of Austria. Here, company will
require less amount of money for introducing new shoes. Even Franchisee will directly open the
outlets as per the instruction given by the company which can be beneficial for organisation
Applying the concepts of market segmentation and targeting critically evaluate the potential
target market of your client.
Market segmentation is also a sales method by which a company conducts its strategies to
separate consumers into different categories. This method is important for businesses as it allows
them to track their competition and identify new segments that lead to the productivity. In
context of Mark & Spencer, they can easily use the concept of marketing segmentation through
which they can determine the potential impact of the customers leaving in Austria. Here, market
has been classified into four different segment which are explained below:
Geographical: The market is explained as per the geographical location. Here, Mark & Spencer
can use this this particular strategy by looking at the customer’s preferences towards the shoes.
As company has chosen its business to expand in the area of Austria where they can easily sell
the higher percentage of shoes (West, Ford and Ibrahim, 2015).
Demographical: In this particular segment, customers are classified on the basis of age,
gender, education, income level etc. By the help of this segmentation, company like Mark &
Spencer will be beneficial to decide that within Austria, which types of customers will try target
to sale the new shoes product in the market.
Psycho-graphical: It is completely related with the lifestyle of local public that how they
live and how they want to represent themselves in front of others. In context of M&S they will
need to look whether the area where they are going to sale the shoes prefer or not and if they
prefer it then what is there major range of spending the price (Felzensztein, Brodt and Gimmon,
2014).
Behavioural: It is based on the behaviour shown by customers. It will give the idea about
customer’s habits, their purchasing habit and even their curiosity for the new product in the
market. In context of the Mark and Spencer, it will be better for them to select those option

where customers are willing to spend higher amount of money on those products which are new
within the market. It will give the stability to company and even their sale can be easily
enhanced.
Market targeting relates to the method of further analysis selecting a target audience from
the categories and determining the company's goods and services and also by trying to find the
best possible audience. This method must be successful, otherwise all the strategies applied on an
inadequate target market will cause the company to suffer huge losses in search of establishing
company in a foreign country. As every people requires the shoes for wearing so it will be easy
for the company to develop the market. Here, company must try to target the customers who like
to were the shoes which are composed with latest technologies. Also, company should focus on
those customers who are of age group from 18 to 50 who loves have different collection of
shoes.
Applying Porter’s generic strategy, explain how your client could gain competitive advantage by
adopting one of the generic strategies in your recommended market.
Porter's Generic Strategies is also recognized as the marketing strategies. It helps business
organisation to form the strategies through which company gets the opportunity to sustain within
the market for longer period of time. The main target of Porter’s generic Strategies is to attract
new customers towards the organisation in which the company operates in current situation. In
context of M&S, they are needed to understand about every single strategy under Porter’s
Generic Strategies. The main product which company will introduce in the market is shoes of
different range. Strength in shoes is its comfort and light weight (Payne and Frow, 2014).
Whenever company uses this strength then three different strategies come in front of the
company and they are cost leadership theory, differentiation strategy and focus strategy. Below,
there is the detail explanation about three different strategies.
Cost Leadership: It is one of the strategy where major focus is that how company can
reduce the price of a product for increasing the percentage of customers towards the company.
This is mainly done for the purpose of giving tough competition to rivalries firm. The sources of
earning in Austria is high due to which people like to spend on the products which they are
willing for. As customers can easily afford the product of high price which means cost leadership
is not required for the company like Mark and Spencer while entering into the market of Austria.

Focus Strategy: It is one of the strategy where company is either required to focus on cost
or product or even differentiation from the other products which are available within the market.
As shoes are the basic product which is required by every people living within the Austria due to
which it is not necessary for the company to give more importance to focus strategy (Proctor,
2014).
Differentiation Strategy: It is one of the strategy where organisation is required to
introduce something new in their product due to which they can sustain within the market. As
people living within Austria loves different technologies and fashion, it can be one of the option
which can be adopted by the company like M&S (Rashid, Rahman and Khalid, 2014). It will
give them the opportunity to present their product in front of the world.
In short, among three different strategies, it will be important for the company to take the
help of differentiation process because it will help them to accomplish the target which they want
within the short span of time.
CONCLUSION
Therefore, the report concludes that strategic advertising can be successful for companies
that wish to extend their operations abroad. A comprehensive macro environment analysis is
necessary to determine external factors which could affect the company's business activities and
the company's product policies. In addition, to effectively enter the foreign market, it is
necessary for businesses to choose the most suitable market entry approach. Differentiation can
be a possible market expansion strategy for companies offering new consumers unique goods.

REFERENCES
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