Rationales behind Marks & Spencer’s failure in the Chinese market, an important lesson to foreign firms

Kunbo Meng

doi:10.54691/bcpbm.v31i.2539

Authors

Kunbo Meng

DOI:

https://doi.org/10.54691/bcpbm.v31i.2539

Keywords:

Marks & Spencer; market-entry; entry mode; post-entry; Chinese market; consumer behavior.

Abstract

China has a complex institutional environment, with its rapidly expanding economy and a rising number of middle class, businesses like Marks & Spencer (M&S) opted to enter this foreign market in 2010 with the expectation of increasing their revenue and brand recognition. The 4Ps marketing model is used in this essay to explain why M&S has failed in their market entry and operations in China. Dissecting and describing the problems associated with their promotion, product, choice of shop location, and pricing. Based on the problems identified, this article also proposes potential solutions on what M&S could do in the pre-entry phase, and the post-entry phase to prevent such failure from occurring.

Downloads

Download data is not yet available.

References

Marks and Spencer. Annual report and financial statement 2010. M&S. (2010-6-10)[2022-7-27]. https://corporate.marksandspencer.com/media/press-releases/2010/annual_report_2010.

Cavusgil ST, Deligonul S, Kardes I, Cavusgil E. Middle-Class Consumers in Emerging Markets: Conceptualization, Propositions, and Implications for International Marketers. Journal of International Marketing, 2018, 26(3): 94–108.

Hong J, Yunting M, Seong-Taek P. A Case Study of Marks and Spencer lost China. Journal of Industrial Convergence, 2018, 16(2): 15-23.

The Telegraph. Marks and Spencer makes swift exit from Chinese market after population collectively asks 'what's a Marks and Spencer?'. Financial Post. (2017-3-15)[2022-7-27] https://financialpost.com/news/retail-marketing/marks-and-spencer-makes-swift-exit-from-chinese-market-after-population-collectively-asks-whats-a-marks-and-spencer.

Malcolm M. M&S shrugs off bad feng shui in Shanghai. The Telegraph. (2010-8-22)[2022-7-27]. https://www.telegraph.co.uk/finance/china-business/7956247/MandS-shrugs-off-bad-feng-shui-in-Shanghai.html.

P Smith. Number of Marks & Spencer stores from 2010 to 2022, by region. Statista (2022-6-14)[2022-07-27].https://www-statista-com.lib.ezproxy.hkust.edu.hk/statistics/268649/marks-und-spencer-number-of-outlets-by-region/.

P Smith. Revenue of Marks & Spencer from 2010 to 2022, by region. Statista (2022-6-14)[2022-07-27]. https://www.statista.com/statistics/413332/group-revenue-marks-and-spencer-united-kingdom-uk-international/.

Jane M, Ilan A, Jennifer D. Marks and Spencer Enters China. Harvard Business Publishing Education. (2013-2-26)[2022-7-27]. https://hbsp.harvard.edu/product/W12512-PDF-ENG.

Wearden G. Marks & Spencer to revamp stores and push own brand. The Guardian (2010-11-9)[2022-7-27]. https://www.theguardian.com/business/2010/nov/09/marks-and-spencer-foreign-expansion.

Dima J, Charlotte K. Corporate Social Responsibility in Developing Countries as an Emerging Field of Study. International Journal of Management Reviews. 2018, 20(1): 32-61.

Zhikun Z, Chuang Z, Jeanine C. The deterrence effect of Guanxi on opportunism: The moderating effects of “three institutional pillars.”. Industrial Marketing Management. 2021, 94: 41-51.

Klaus EM, Saul E, Sumon Kumar B, Mike WP. Institutions, resources, and entry strategies in emerging economies. Strategic Management Journal. 2009, 30(1): 61-80.

Chris CC, Paul WB. The Impact of Institutional Reforms on Characteristics and Survival of Foreign Subsidiaries in Emerging Economies. Journal of Management Studies. 2005, 42(1): 35-62.

Prange C. Market Entry in China: Case Studies on Strategy, Marketing, and Branding.1st edition.New York: Springer International Publishing, 2016.