Marks Spencers Internationalization Ventures and Failures

Marks Spencers Internationalization Ventures and Failures Introduction For years, successful businesses have sought to increase their share of the markets by expanding their operations and by making their products and services available to a larger percentage of customers. Expansion is normally attained on two different levels, namely, local expansion and internationalization. Globalization, and the benefits that can be sought from it, has encouraged businesses to focus more on internationalization strategies as a means of expansion while ensuring that their local footing is firm and not marred by competition or other local issues. Marks Spencer, for one, has been trying time and again to expand its business internationally not only through franchising but also by opening retail stores (retail internationalization) in the most promising of all international markets. A look into the history of Marks Spencers internationalization ventures shows nothing but failure in almost all of its foreign markets leading the company to either exit these markets or p artially selling off its stores (Kollewe 2010). The report throws light on the issues faced by Marks Spencer in the past and also focuses on its current position in order to analyze the newly developed strategies for internationalization, whether or not it is worth the risk. It then follows with possible recommendations for the senior management of Marks Spencer while ending with a conclusion that, keeping in mind the present scenario, recommends whether or not the new strategies for internationalization are worth pursuing and investing capital in to help the company regain its market value and achieve growth. Marks Spencers Internationalization ventures and failures Over the years, Marks and Spencer has faced rocky business ventures in most of the foreign lands where it decided to expand its business. Marks Spencer has opened retail stores and franchises in many countries of Europe and also expanded its business to Canada and America. These ventures, however, did not prove to be as successful as was hoped by the companys management because they were seen as more of a distraction than benefit. The management at MS believed that these low-profit global ventures were making the management lose its focus on UK, the primary market of MS. The company has, therefore, been forced to resort to exit from the some of the markets and partial pullouts from others by closing or selling off 38 of its stores all around Europe under its desire to revamp its stores in Britain in an attempt to shift focus to the retail business of UK and its British customers. These pullouts have resulted in serious damage to the brand image of Marks Spencer as the company perfo rmed brutal overnight layoffs and thus causing widespread anger among employees and customers. These unannounced and abrupt pullouts caused displeasure among MSs loyal customers as they felt betrayed by the company for not being informed about its withdrawal from their markets. This deed of Marks and Spencer is going to cost it employee and customer loyalty in the future, if ever it wishes to step into these markets again. Employees would consider twice before accepting a job at MS while customers too would find it hard to rely completely on the brand. One of the major problems with Marks Spencers earlier ventures, as spotted by Bolland, was that it tried getting into too many markets at the same time without actually completing its entry into one market. It simply shifted its attention from one country to another in an attempt to capture more market share than paying attention towards maintaining a firm grip on the markets share captured already (Holmes 2009). This therefore resulted in less profitability and lower revenues causing the company to withdraw eventually. Current internationalization strategy Marks Spencers new Chief Executive, Marc Bolland, has set new strategies for the internationalization of MS. A new wave of international ventures has thus been planned in an attempt to restore the companys position in Europe and to reach out to the markets of Asia. Marc Bollands strategy of selective internationalization includes stepping carefully into international markets in order to avoid recurrence of failures that the company faced in the past. He has therefore, proposed India and China as the markets in Asia where he would introduce MS (Roy 2008). For this, he has advised a selected approach wherein only markets that promise a higher profitability would be tapped and there will be more franchises than company-owned stores. Marks Spencer has planned on entering India by partnering with the countrys Reliance Group while for China, Bolland has clearly stated that it would proceed to, and focus on Shanghai rather than the whole of China as China is, according to him, a group of multicultural countries that neither shares a same language nor a similar view on style (The richest 2011). The management has been advised by Bolland to make use of Chinese knowledge when establishing the companys presence in China. Bolland has also advised a combination of bricks and clicks in their new internationalization strategy due to which the company would open one flagship store in the capital, a few stores in major shopping malls while the rest of the operations would be taken online as these markets have high internet density and online shopping is not an alien concept for the people of these markets. The company has also planned on moving into Egypt by opening its very first store in the country. A combination of bricks and clicks has not been emphasized upon as internet has not yet gained much popularity in the country thus rendering too much dependence on online business useless. Egypt will not be, however, discussed in this report as the main focus of this report is internationalization with respect to India and China. The new internationalization strategies adopted by Marks Spencer seem very promising and indicate higher profitability and customer shares than the previous strategies adopted by the company. India and China are, indeed, densely populated countries where the rich have high purchasing powers and are more aware of and interested in international brands than most countries of Asia. These countries are also host to a high number of foreign travelers that would help the company gain more in terms of sales and revenues. Conclusion The new plans of international expansion undertaken by Marks Spencer are a series of carefully calculated steps that the company decides to take in order to prevent itself from stepping into the quicksand of failure. The company should, again, try to expand its business internationally so as to increase its business operations. Globalization is an important factor that successful companies should consider as it helps them gain recognition by people all around the world. It is about time that Marks Spencer starts focusing on internationalization as a means of expansion to avoid being forced out of the market by competitors. By moving into the markets of India and Shanghai, MS has not only targeted two of the most densely populated countries of Asia but also two of the largest economies in emerging markets. Investment decisions in these two countries hold a promising future for MS that would not only be promising but also stable. The consumer market of India is also a highly adaptable market. People of these markets are easily influenced and are more prone to shift towards international brands regardless of how expensive their products are. The market of India has adopted the concept of westernization more rapidly and it has gives higher preference to international brands than local brands. China too holds better future prospects as it has now become the second largest economy of the world (BBC, 2011). India ranks as the fifth largest economy in terms of PPP GDP (CIA World Factbook, 2011). Hence the company should proceed with internationalization. Recommendations Even though the market of Asia is greatly influenced by western culture, it is also inclined towards its own regional culture and traditions. In order to gain greater popularity among customers, MS should introduce a line of traditional wear in whichever region it is targeting to operate in. Choosing regional brand ambassadors instead of international celebrities would help them gain popularity faster and even increase their brand equity and credibility. This would highlight the regional emphasis in the brand more. Clothes should be stitched keeping in mind the size definitions of the region being operated in and not simply introducing apparel with UK based sizes. MS should opt for test marketing by opening only a flagship store first to see how well the markets respond to the idea of MS in their country rather than investing heavily all at once. Adopting cultures of the regions or sectors MS is operating in will enhance brand loyalty. The company should also merge into accessories and home apparels market for the sector. Giving options under a single brand increases the likelihood of equity and attraction of customers which will directly effect on the brand and sales. Since China and India are emerging markets, MS should focus more on the middle-class segments of these markets.

Non Tariff Barriers

NON TARIFF BARRIERS What are non tariff barriers? Non- tariff barriers are broadly defined as any impediment to trade other than tariffs. Non tariff barriers can be classified into two groups; Direct and Indirect. (a)Direct Barriers are barriers that specifically limit import of goods or services. Eg: Embargoes and quotas EMBARGOES: Embargoes are the most restrictive of the direct non tariff barriers. They are either a complete ban on trade with a foreign nation or a ban on sales or transfer of specific products. Eg: The U. S. has imposed embargoes on Afghanistan, Cuba, Iraq and Iran. QUOTAS: Quotas are a quantitative restriction on imports. They are based on either value of goods or on quantity. They can be placed on all goods of a particular kind coming from all countries, a group of countries or only one country. (b) Indirect Barriers are laws, administrative regulations, industrial/commercial practices and even social and cultural forces that either limit or discourage sale or purchase of foreign goods or services in a domestic market. To restrict imports, countries may impose monetary or exchange controls on currencies. Foreign governments can impose technical barriers to trade, for example, performance standards for products, product specifications or products safety. Eg: Japan has governmental restrictions on the use of food preservatives. It is a trade barrier in disguise, because foods without preservatives cannot be transported long distance. Import Licensing Schemes and Customs Procedures Some governments require importers to apply for permission to import products, subjecting them to complex and discriminatory requirements. It is often expensive and time-consuming. Let us look at some tariff measures that are maintained against Indian exports: 1)Country- The United States of America Product- Marine Products Non tariff barrier- Increased in-detailed inspections under the Bio-Terrorism Act. -Customs Bond requirement -Mandatory labeling discriminating ‘farm-raised’ & ‘wild’. -Punitive fines in case of non-compliance -Non-recognition of EIC certification 2)Country- Columbia Product- Pharmaceuticals Non tariff barrier – Registration by Columbian Drug Control and Certification takes 11-12 months and is very tedious. Inspections are undertaken for environmental compliance and punitive fines are levied in case of non-compliance 3)Country- Bangladesh Product- Poultry products Non tariff barrier- Bangladesh continues to ban imports of poultry products despite India gaining the ‘Avian influenza free’ status. )Country- Chile Product- Wheat, wheat flour, sugar Non tariff barrier- Complex price band system -A minimum import price (well above international and domestic prices) is stipulated. The Argentinean Customs can ask for validation of Indian Customs Invoice and a full set of original documents if they suspect that the invoiced value is less than the minimum import price established. 5)Country- China Service- Banking Non tariff barrier- China maintains a number of regulatory barriers which make investment in the banking sector very difficult. While foreign banks are allowed to open branches, regulatory treatment remains discriminatory. Branches of foreign banks are for example subject to higher capital norms than Chinese banks, which moreover are coupled with the number of their offices. Costs for establishing bank branches in China are therefore very high and foreign banks market share in China remains marginal REFERENCES International Business Law and its Environment- Richard Schaffer, Filiberto Augusti & Beverly Carle International Business- Francis Cherunilam

Out of Control Interview

Application Case – The Out-of-Control Interview 1. How would you explain the nature of the panel interview Maria had to endure? Specifically do you think it reflected a well-thought-out interviewing strategy on the part of the firm or carelessness on the part of the firm’s management? If it was carelessness, what would you do to improve the interview process at Apex Environmental? It is possible that the panel interview of Maria Fernandez at Apex International was a stress interview designed to determine how she reacts under pressure and with a barrage of irrelevant and sexist questions. However, stress interviews are viewed as unethical and of poor taste. Apparently, Apex International management was careless in its interview strategy. First, it constituted a panel of five men who maybe well acquainted with the company’s operations but could be possibly lacking in experience in HR functions, particularly in recruitment and selection. It is assumed that the HR manager or any HR specialist who could have provided structure, direction and control to the interview was not part of the panel. To address this concern, it is highly recommended that Apex International conduct trainings for interviewers in order to maximize utility of interviews as a tool at arriving at a selection decision as well as to avoid straying off course and asking questions that have potential job discrimination implications. 2. Would you take the job if you were Maria? If you’re not sure, is there any additional information that would help you make your decision, and if so, what is it? I am unsure in taking the job offer. I would take into careful consideration the company’s Code of Conduct and Ethics. Based on what happened, it appears that there are concerns on the culture of the company, particularly on sexual harassment and equality in the workplace. Questions asked during the panel interview indicate loose policies on sexual harassment. While interviews are primarily designed to find out if the job applicant has the experience and skills needed for the position, it could also be a tool for the company to emphasize its culture, leadership, among others. . The job of applications engineer for which Maria was applying requires: (a) excellent technical skills with respect to mechanical engineering; (b) commitment to working in the area of pollution control; (c) the ability to deal well and confidently with customers who have engineering problems; (d) willingness to travel worldwide; and, (e) a very intelligent and well-balanced personality. What questions would you ask when interviewing applic ants for the job. Sample Questions: 1. How do you think your mechanical engineering degree can help you in your job in pollution control? 2. If I were to ask your reporting staff to comment on your leadership style, your leadership strengths, and your leadership weaknesses, how would they respond? What would this discussion tell me about you as a leader? 3. Suppose a client approached and asked you a difficult technical question that you could not answer. What would you do?

Death of a Salesman A Play by Arthur Miller

Death of a Salesman was written by Arthur Miller in 1949. The play earned him success and a prominent place in theater history. It is a popular production for school, community, and professional theater companies and is considered one of the essential modern plays that everyone should see.​ For decades, students have been studying Death of a Salesman,  exploring various elements of the play, including  the character of Willy Loman,  themes of the play,  and  criticism of the play.  Dramatists Play Service  holds the rights to Death of a Salesman. Act One Setting: New York, the late 1940s Death of a Salesman  begins in the evening. Willy Loman, a salesman in his sixties, returns home from a failed business trip. He explains to his wife, Linda, that he was too distracted to drive and therefore headed home in defeat. (This wont earn him any brownie points with his boss.) Willys thirty-something sons, Happy and Biff, are staying in their old rooms. Happy works as an assistant to the assistant buyer at a retail store, but he dreams of bigger things. Biff was once a high school football star, but he could never embrace Willys concept of success. So he has just been drifting from one manual labor job to the next. Downstairs, Willy talks to himself. He hallucinates; he visualizes happier times from his past. During one of the memories, he recalls an encounter with his long-lost older brother, Ben. An adventurous entrepreneur, Ben declares: When I walked into the jungle, I was seventeen. When I walked out I was twenty-one. And by God, I was rich. Needless to say, Willy is envious of his brothers achievements. Later, when Biff confronts his mother about Willys unstable behavior, Linda explains that Willy has been secretly (and perhaps subconsciously) attempting suicide. Act One ends with the brothers cheering up their father by promising to meet with a big shot businessman, Bill Oliver. They plan to pitch a marketing idea -- a concept that fills Willy with hope for the future. Act Two Willy Loman asks his boss, 36-year-old Howard Wagner, for $40 a week. (Recently, Willy has not been making zero dollars on his commission-only salary). Somewhat gently (or, depending on the actors interpretation, perhaps disrespectfully), Howard fires him: Howard: I dont want you to represent us. Ive been meaning to tell you for a long time now.Willy: Howard, are you firing me?Howard: I think you need a good long rest, Willy.Willy: Howard -Howard: And when you feel better, come back, and well see if we can work something out. Willy tells his troubles to his neighbor and friendly rival, Charley. Out of sympathy, he offers Willy a job, but the salesman turns Charley down. Despite this, he still borrows money from Charley -- and has been doing so for quite some time. Meanwhile, Happy and Biff meet at a restaurant, waiting to treat their dad to a steak dinner. Unfortunately, Biff has bad news. Not only did he fail to meet with Bill Oliver, but Biff swiped the mans fountain pen. Apparently, Biff has become a kleptomaniac as a way of rebelling against the cold, corporate world. Willy doesnt want to hear Biffs bad news. His memory drifts back to a tumultuous day: When Biff was a teenager, he discovered that his father was having an affair. Ever since that day, there has been a rift between father and son. Willy wants to find a way for his son to stop hating him. (And hes been considering killing himself just so Biff could do something great with the insurance money.) At home, Biff and Willy shout, shove, and argue. Finally, Biff bursts into tears and kisses his father. Willy is deeply touched, realizing that his son still loves him. Yet, after everyone goes to bed, Willy speeds away in the family car. The playwright explains that the music crashes down in a frenzy of sound symbolizing the car crash and Willys successful suicide. The Requiem This short scene in Death of a Salesman takes place at Willy Lomans grave. Linda wonders why more people didnt attend his funeral. Biff decides that his father had the wrong dream. Happy is still intent on pursuing Willys quest: He had a good dream. Its the only dream you can have -- to come out number-one man. Linda sits on the ground and laments the loss of her husband. She says: Why did you do it? I search and search and search, and I cant understand it, Willy. I made the last payment on the house today. Today, dear. And theyll be nobody home. Biff helps her to her feet, and they leave the grave of Willy Loman.