Marks and Spencer (m&s) to Canada

...

Secondly it is observed by Middleton et al. (2010) that the internet coverage and adaption rates in Canada are very high. In fact the country is among the highest in the world in this aspect with almost 90 per cent of the country’s entire population being active internet users. This can mean that M&S could use the internet platform to advertise its products and services while consider using the channel to expand its retail network in the country.

Environmental Factors

Climate in Canada sees the country have distinctive weathers during one year. This means that the local consumers are in demand of various types of products in different seasons. Therefore M&S can offer a wide range of products in the country. In addition, Canada is a large country with some significant regional differences. As a result M&S might be having the need to differentiate its product ranges for customers located across the country.

SWOT Analysis of Marks and Spencer

Strengths

Established brand name and reputation

Large product range and high product quality

Extensive product portfolio

Large operation scale

M&S has a long history and is an established brand in the consumer retail market. Its international operation helps it to consolidate its brand name and reputation, which can be used to its advantage in the Canadian market. At the meantime the company has large product range to satisfy various consumer demands. The high product quality also sets the company apart from some major supermarket chains which have more emphasis on pricing competitiveness. In addition, the retailer has an extensive product portfolio that includes not only food but also clothing and home furniture which allows M&S to attract consumers from different segments. Last but not least the company could also draw on its large operation scale and marketing experience to optimise its foreign market expansion.

Weaknesses

Lack of successful market experience in North America

Clothing products not trendy

Lack of online presence

Despite its international operation and some success in the foreign markets, M&S had previously experienced much difficulty in the North America market (US). The company only maintained its American operation, which had M&S having ownership of the local businesses Brooks Brothers and Kings Supermarkets, for three years (Gandolfi and Strach, 2009). In fact, M&S failed to establish in Canada when the company decided to directly transfer the American business model and as a result struggled to attract the local customers (ibid.). On the other hand despite their popularities, the clothing brands offered by M&S lack competitiveness for their lack of trendiness (Bhardwaj and Fairhurst, 2010). Last but not least, M&S does not offer the full online shopping service at the moment as customers can only order online and collect in stores. This business model could suffer in a large country such as Canada when travelling to the stores is not always an easy option for the customers.

Opportunities

Optimal political and economic conditions

Building on past experience in the market

Population growth

Similar social conditions to UK

Partnership with local suppliers

Online retail

As highlighted in the environmental analysis, the political stability and accommodating policies for international business activities, as well as the large economy together present significant growth opportunity for M&S in the Canadian market. Drawing on its past failure in the country, the company can expect to have much more success through localising its operation. On the other, the similar social conditions to UK will also help the company to establish itself among the local customers. In addition, considering the strength of the Canadian farming industry, M&S could identify suitable local suppliers for its foreign expansion. Last but not least there is the opportunity for M&S to offer online shopping as a far reaching and economic model of business operation (Hansen, 2008).

Threats

Competition from other international retail chains

Difficulty in meeting local demands

Cost to set up local supply chain

Technological development resulting in need to change

Most significantly, M&S has to deal with intense market competition from not only the local retails but other international brands which are seeking international growth (Coe and Lee, 2013). This is combined by the difficulty for the company to effectively change its current model to meet local demands. On the other hand, setting up local supply chain would require substantial capital investment for the company and this cost could damage the profit level at least in the short term. In addition as M&S is not the most advanced in adapting to technological developments, the company could face further challenges in this aspect to change and improve its operation.

Market Entry Strategy

During its previous international expansion in the North American region, M&S adapted the method of merger and acquisition to purchase local retailers and operated under the original brand names (Gandolfi and Strach, 2009). The failure was not thought to be largely due to this choice of market entry strategy however it was noted that the company at the time suffered from not having a clear long term market positioning plan (Hibbert, 2015). In its new round of global expansion, the company has decided to use flagship stores as it market entry strategy (Marks and Spencer, 2014). The company aims to establish a strong brand image via this method, and this will be an effective approach according to Picot-Coupey (2014) as these stores are physically distinctive and have the capacity to showcase the entire range of products and services. Therefore this method is beneficial for M&S to take advantage