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Analysis of the Joint Venture entry mode of Marks and Spencer in China with secondary data - Essay Example
Author : loragusikowski
Pages 4 (1004 words)
The research henceforth will aim at analysing the reasons for the breakdown of M&S in the Chinese market. Correspondingly, a comparison will be made with Tesco’s failure in China, where both the multinationals, i.e. M&S and Tesco had penetrated the market through joint venture (JV)…
It is evident from the research that several challenges and problems encompass the entry of M&S in the market of China. With the opening of their first outlet in the Chinese market, the company experienced a dip in its performance, which was accounted as considerably lower than the expected level in the Chinese market. The outlets opened by M&S, at the initial phases of its operations in the Mainland China, failed to satisfy the needs of the Chinese local customers owing to the company’s lacuna to identify customers’ preferences in the market and offer services accordingly. For instance, the M&S stores were unable to provide garments of smaller sizes, as preferred by the customers in China. Reportedly, the supply chain of the company was also lacking its usual effectiveness, which further inhibited the reputation of the company in the Chinese market, at its introductory phase. Additionally, it was also known that the management of the retail chain was implementing its strategic experiences gained from its operations in Hong Kong, irrespective of the fact that the consumer buying behaviour are found to be considerably distinct in these two regions. This again depicts the lack of market survey of the company taking into account the tastes and preferences of customers in the host country. In addition, the decisions taken by the company for not collaborating with any of the local firms in China, i.e. ignoring the benefits of JV also barricaded the utmost efficiency of its strategies by restricting the cooperation of local firms to a certain extent. ...
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