STRATEGY FORMULATION AND IMPLEMENTATION

Present Situation
M&S entered China in 2008 but still in 2012, its not able to establish itself as a major player in the
market. Want to reinvent/redesign its business strategy in China for future.

Problems identified
What went wrong in past?

A. OPERATIONAL
1.Wrong timing of entry into China when it was in the middle of Global Financial Crisis.
2. First day disappointment to customers because of bad infrastructure (poor paint job, scuffed walls),
unattractive and limited goods, and no food stock(blocked at custom dept)
3. Poor inventory supply.
4. Only one format (clothing and food combination stores) opted in China.
B. PRODUCT
1. Failure in adaptation to Chinese build. Oversupply of large fitting clothes and undersupply of small
fitting ones.
2. Outdated & unfashionable. Did not cater much to young consumers and perceived to be a middle
aged consumer brand.(initially catered to British expatriates)
3. Quality and service, M&S core values, not making a difference over other competitors.
4. Failure in food adaptation
C. COUNTRYS DIFFERENCES
1. Language barrier
2. Cultural differences (power distance, individualism and orientation from Hofstede index, Exhibit 4)
C. PRICE
Not affordable price(M&S core value) for clothes and foods based on wage structure. Did not cater
much to whole of the society based on income groups rich, poor & middle class.

D. MARKETING/PROMOTION
1. People were not educated/informed about M&S products.
2. Lack of brand awareness for M&S and its Chinese translation Ma Sha Bai Huo among consumers.
3. Promotional material was not adapted.
E. PLACE
Some centers opened at wrong places, far from actual consumer base.

F. OTHERS
M&S stores became a bad omen after the accidental death of a person falling from escalator

Some more points to ponder upon
1. China is a couple of countries with huge difference in different markets.
2. Big growth market for food and grocery market.


Strategy Formulation & Implementation
1. Developing and sustaining competitive advantage (Managing internal environment)
VRIO framework (for China market)
M&S Resources Valuable? Rare? Costly to
Imitate?
Exploited
by Org?
Brand Value Y Y Y Not much
Core Value-Quality & Services Y Y Y N
Affordable products Y Y Y N
Broad portfolio of M&S collections
Y Y Y N
Huge Employee base
Y Y Y Not much

So there are a number of resources where M&S can bring sustainable competitive advantage but it need
to exploit them more. Establishing brand value by different promotional strategies, punching on its core
values of quality and service by providing superior products over other brands and most importantly,
pricing according to countrys standards.
Again broad portfolio of products with different range, but still people think its only for middle aged
group. Better promotion can diminish this gap between perception and reality.

2. Adaptation needed (Managing external environment)
Proper market analysis and research is needed to adapt/customize according to Chinese market on the
following fronts



A.OPERATIONS
1. One major thing they can opt for is establishing different formats like premier, major simply food as
done in UK so they will be more focused on their products and the underlying customers according to
their needs and requirements.
There is a big scope of grocery and food market in China so M&S can consider to open exclusive stores
for them at big food junctions.
2. Relaunching M&S stores in China, this time with proper infrastructure and at the right time(some
festival or buying season) and providing better inventory control with all the products and supplies.
B. PRODUCT
1. Design clothing according to the Chinese build and sizing
2.Bring new and fashionable products catering to everyone and special attention to youngsters which
have the buying capacity and are in large no in China.
3. Adapting food, taste & preferences according to Chinese requirements.
C. COUNTRYS DIFFERENCES
1. Removing language problem by incorporating Chinese texts, packaging and labeling according to their
understandability and also hiring Chinese as store managers who also act as interpretors to resolve.
2. Adapting to the mindset of Chinese people with their consideration of Power distance , individualism
and orientation towards long term and short term goals.
C. PRICE
Affordable pricing for products as well as food for people who can actually buy them. Even can keep
categories for luxury, good and normal products and food and set their prices accordingly.

D. MARKETING/PROMOTION
1. Educate Chinese population about different M&S products and its brands using promotional
campaigns, advertisements, videos, different promotional channels.
2. Adapting promotional channels according to the the preference of Chinese, what are their daily
sources of entertainment and from where they collect info about different products in market.
E. PLACE
1. New centers to be opened near the consumers. Do market analysis to find out major market and
capture them.

F. OTHERS
Following Chinese religions and cultures so that people treat M&S brand with respect and doesnt think
it having any bad omen.



3.Extensive Market Analysis, Research and Penetration for new Markets
Firstly establishing itself in present markets then move to surrounding regions. As surrounding regions
vary largely amongst themselves, need to evaluate each market separately. Initially focus on the most
suitable ones which can be found out by first segmenting the market.
It will allow them to view different consumer needs and categories in the overall market by dividing the
market into 7-8 smaller markets. M&S can then assess which segments best fit with the firms strategy
and resources, as well as assessing the current and future attractiveness of each segment.
Target those market segments and consider how to construct a marketing program to achieve success.
There are 2 parts. The first is positioning, which is how M&S wants its products to be perceived
(understood) by consumers in that particular market. Once the desired positioning has been determined
an appropriate and supportive marketing mix then needs to be developed and implemented.
Its organizational structure like using the international visual merchandising team and integrated
international maketing team to be established in China too in every market. Also establishing of local
sourcing center in China so to gain economies of scale.