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The current internationalisation policy with respect to global strategy theories - Essay Example

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The current internationalisation policy with respect to global strategy theories

This essay discusses that Marks and Spencer started its operation back in the 19th century with a stall on Kirkgate market in Leeds. The company targeted clients with above average income and provided high quality garments. The company also sells luxury food items. It was the first retailer in Britain to achieve 1 Billion pound pre tax income. The company operates in different countries today but its market share is not as it was before. The company’s internationalisation process failed drastically which made the company lose its clients. The international operations of Marks and Spencer were contributing a mere 1.25% to the pre tax income of the whole firm by 2000. This shows how Marks and Spencer failed drastically in going global. Marks and Spencer started its formal internationalisation through acquisition in Canada in1973. Therefore Marks and Spencer was not new to internationalisation in 2000 but still the company did this bad. International sales consisted of 25% of company’s retail floor but still its contribution to company profits was negligible. This is clear evidence of the failure of internalisation of the company. The company used different modes of entry ranging from acquisition to franchising. Mostly Marks and Spencer attempted to establish its own stores abroad through acquisition but franchising was also used in countries with less population. The policy of controlling everything on its own is deeply engrained in the culture of the company as managers usually like to do something by themselves. This is why acquisition were mainly preferred for both food products and clothing line while franchising was used when market was too small to start operations directly. The main problem of the company was its strict bureaucratic culture. This culture hindered the flow of innovative ideas within the company as senior management was not interested in newer ideas (Case Study Marks and Spencer, 2011). This is what led to the downfall of the company both in the international arena and in UK. The company wanted to grow but its growth strategy was based on traditional mindset of acquisition. They thought they could continue to grow like before if they persisted using their same old business strategy but while doing so they ignored competition and changing business environment. Research suggests that bureaucratic culture lowers innovation and performance of firms (Homburg & Pflesser, 2000). This is one of the reasons why internationalisation went bad for Marks and Spencer. There was also lack of vision when it came to internationalisation within the company. They focused too much on daily activities without taking into account the long term direction the company should take (Case Study Marks and Spencer, 2011). This also had an adverse effect on the global performance of the company because it ...Show more
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In this paper the researcher will assess the current internationalisation policy with respect to global strategy theories. The researcher will also provide a list of recommendations that may contribute to the success of the global strategy of Marks and Spencer. …
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