China analysis: Marks & Spencer

Résumé du document

China being a highly appreciated country for its power in the global market and its rapid growth, enterprises are keen to invest in it in order to remain competitive. In recent years, China has evolved and developed rapidly in many areas. For this reason, many companies such as Carrefour, a French retailer, have begun to invest in China, the first European company and second in the world after Wal-Mart to do so.

Understanding how and why retailers want to invest in China explains the internationalization of Marks & Spencer in this market.

Firstly, it is important to define retailing. And it can be defined as the sale of goods or merchandise from a fixed location such as shops or stores, also known as retail establishments. Retailers are at the end of the supply chain and manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. There are many formats of stores, the most important being the hypermarket. A hypermarket is a large retail store (minimum floor space of 2500 square metres in the UK), selling both food and non-food items. It is characterized by an optimized cost structure compared to other forms of smaller businesses (supermarkets, convenience, grocery and so on).

Concerning the market of retailing, there are 65 million potential customers in the UK and 1.3 billion in China. This is among the first reasons for investing in China. It's very interesting to understand why a firm like Marks& Spencer wants to invest in China and not in other countries.
China being an emerging country, in 1992, it opened its market to foreign countries. The foreign companies could also invest in China and they collaborated with Chinese companies and this resulted in a joint venture with the competitors.

Extraits

[...] Finally, Marks & Spencer is an English distributor who wishes to develop its market share and develop its brand in China. Today, more and more companies want to expand their market share and build their businesses around the world. But some countries are more promising than others. At first, Au-Yeung and Henley (2003) explain that the international firms have many reasons to go into business in China. In fact, after an interview with eight retailers in the world, they discovered that the changes in purchasing power and the prospect of increasing profitability are the main engines. [...]

[...] For this reason, many companies such as Carrefour have come to invest in China. Carrefour, French retailer, is the first in Europe and second in the world after Wal-Mart. Understanding how and why retailers wanted to invest in China. Therefore, it explains the internationalization of Marks & Spencer on it. Moreover, it is necessary to ask a question which will be answered thanks to the development of the essay. This research question is: How Marks & Spencer could become a good competitor in China? [...]

[...] M&S has to be where the demand is and this places it in front of its competitors. The fourth reason is that M&S offers a wide range of products at all the prices so it can meet any demand from China. With these points, M&S can manage to make the difference to be a good outsider today of foreign retailers in China. Unfortunately, there are some elements which M&S must be careful REFERENCES Website references: Background Business in China Information about the food retail in China [online] Available at: http://www.business-in-asia.com/china_retail.html Main Body Analysis of the Chinese Market Chine information Cinq questions sur la fiscalité en Chine [online] Available at:http://www.chine-informations.com/guide/cinq-questions-sur-la- fiscalite-en-chine_1705.html David Houstin (2007) Les salaires en Chine [online] Available at: http://www.chine-informations.com/guide/les-salaires-en-chine_1834.html La poste (2007). [...]

[...] and Weyers J. (2007) to write Dissertations & Project Reports?” Pearson Education Limited Literature review Reports Au-Yeung A. & Henley J. (2003) “Internationalisation strategy: in pursuit of the China retail market” European Business Journal Gamble J. (2006) “Multinational Retailers in China: Proliferating ‘McJobs' or Developing Skills?” Business Source Premier (Digital Library) Khavul S. (2007) “Learning during and after internationalization by entrepreneurial firms from emerging economies” Business Source Premier (Digital Library) Li & Fung Research Centre (2004) Growing Power of Foreign Retailers in China” Business Source Premier (Digital Library) Book Central of union of Hong Kong (2004) QUI PROFITE LE MIRACLE? [...]

[...] But, it stays at this time 43 million of unemployed. Therefore, lots of companies have been created but few of these offer good conditions of work concerning the wage, the hours of work the environment, the social protection. Thus, the workers are in a delicate situation with little unions to help them. Thus, the author has presented the difficulties of the workers in China. In order to explain more in detail these theories, in the third part of the main body, there will be an application of the tools Marketing Mix, Porter analysis and Swot analysis. [...]