Moving From the UK to China: The Case of M&S and How Fashion Brands Should Adapt Their International Strategy to Consumers

Case study published by Bloomsbury Fashion Business Cases.

Marks & Spencer (M&S) is a 136-year-old British retailer. It is recognized as a general merchandise retailer, including a mix of fashion and non-fashion goods within its product offer (Moore and Burt 2007). The retailer has eight decades of international experience, having started exporting in the 1940s. It opened its first overseas store in the 1970s in Canada but since has had a turbulent time of international expansion and retrenchment. M&S has become of increasing interest to academics such as its demise from one of the most successful British retailing companies to one facing rapid decline (Burt et al. 2002). The focus of this case is its specific decline and ultimate retrenchment from China.International retailing research has increased significantly since the 1970s, facilitated by the emergence of retailer super-brands that generated international appeal (Moore and Burt 2007). Fashion retailers are known to be the most international of all retailers (Doherty 2000). A key debate has been the internationalization strategy retailers adopt when entering new markets—either adaptation, to fully respond to the needs of local consumers, or standardization, to benefit from economies of scale (Levitt 1983; Salmon and Tordjman 1989). Whilst Levitt argued for standardization on the basis of worldwide convergence of consumer needs and wants, namely a global strategy, alternative strategies were identified, for example, a multinational strategy, which seeks to preserve brand image across markets but also adapts to fit local market conditions and consumers (Salmon and Tordjman 1989), to a fully localized strategy, where all facets of the firm are adapted.Even though studies are numerous on this topic, a large proportion of internationalization ventures result in failure, specifically fashion retailers (Burt et al. 2002). In particular, differences in consumer buying behavior and national culture are recognized as impacting firm success or failure (Ricks 1993; Steenkamp 2001) and standardized global strategies have been criticized for failing to recognize these country nuances (Moore and Burt 2007). This case study of Marks & Spencer’s entry into China aims to highlight some of the specific factors and asks students to consider the pitfalls and challenges at play for M&S in their strategic approach to tackling China, and how they might have adapted their strategy to succeed.

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