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Marks & Spencer in China: To Stay or Leave?

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The case describes the position of Marks & Spencer (M&S), a leading high-street retailer in the UK.  The retailer decided to enter China’s retail market in 2008 is based on perceived synergies between the company’s products and an increasingly affluent Chinese middle class. Upon entry, M&S encounters myriad challenges that are not part of its original strategic calculations: errors in basic shop keeping, an evolving Chinese retail environment, and the emergence of e-commerce.

M&S’s difficulties in China among foreign retailers are not unique, however. Numerous high-profile retailers, such as Tesco, Best Buy, Home Depot, and Asos, find China’s retail market inhospitable, leaving shortly after entry. Although M&S experiences challenges similar to those these firms faced, it also encounters a shifting retail landscape that even some experienced local retailers find difficult.  After eight years in China experimenting with different business models and deteriorating financials, M&S faces a key decision: should it stay or leave?

Learning Objective:

  1. To understand why an increasing number of MNCs are leaving China through the example of M&S. Although numerous MNCs spoke of the country’s unparalleled commercial promise after China’s accession to the World Trade Organization (WTO), many have now drastically reduced their operational footprint or left altogether.Analysis focuses on helping students understand reasons why M&S initially entered market, as well as potential market-based reasons why the company left China.

  2. To explore established and emerging models of e-commerce in China. Retail is one of the fastest-evolving sectors in China as e-commerce and online shopping and payments remake the competitive playing field.Analysis will focus on helping students understand the current models of e-commerce utilized and the advantages and disadvantages of each.

Year of Publication: 2019
Ref. No.: 18/609C
Discipline: Strategy & General Management
Industry: Retail & Wholesale
Country: China (People's Rep. of)
Company: Marks & Spencer
Languages: English
Pages of Text: 8