Marks and Spencer (m&s) to Canada

Module Code: PM003

Class/Group:Z

Module Title: Global Corporate Marketing

Assessment: Marketing Report

Assignment Title: M&S to Canada

Tutor Name: Eileen McCorriston

Student ID Number:2171362

Date of Submission: 6 July 2015

Content Table

Introduction        

PESTLE Analysis        

Political Environment        

Economic Conditions        

Social Environment        

Technological Factors        

Environmental Factors        

SWOT Analysis of Marks and Spencer        

Strengths        

Weaknesses        

Opportunities        

Threats        

Market Entry Strategy        

Recommendations        

References        

Introduction

Marks and Spencer (M&S) is a British retailer with a long history in its domestic market. The retailer specialises in food, clothing, and home furniture; and has in recent years expanded into the financial service market. The operating principle of M&S is based on superior value proposition to the consumers that does not compromise product quality. In addition the retailer takes great pride in its continuous commitment to providing great customer service (Cairns et al., 2008). M&S is UK’s largest retailer and in particular lead the clothing segment with a 17 per cent market share. The company has its international operation across the European area and also in the Middle East and Asian regions (Fernie, 2009). In a recent press release the company also announced its plan to further grow its international business: in April 2014 M&S indicated its intention to open 250 international shops in three years (Marks and Spencer, 2014).

This report analyses the prospective for M&S to expand into the Canada market. It carries out a market environmental analysis through the use of PESTLE, and an internal audit of the company by using the SWOT analysis. These are followed by an evaluation of suitable market entry strategies for the company to take. At the end of the report recommendations will be provided for M&S for its expansion into Canada.

PESTLE Analysis

Political Environment

Canada’s political system is parliamentary democracy. The country has many strong democratic traditions which have been preserved very well over the years to ensure a very stable situation (Smith, 2013). This contributes to a positive business environment in which international business organizations such as Marks and Spencer could expect to benefit from. On the other hand, Canada is committed to maintaining and encouraging international free trade. Such is reflected by the country’s involvement in the North American Free Trade Agreement (NAFTA) which has been in effect since the year of 1994 (Aspinwall, 2009). This further justifies the decision for M&S to enter the market as the company can expect the local government to support such foreign business activity.

On the other hand, since the financial crisis in 2008, there has been increasing political pressure on the Canadian government to ease its domestic unemployment problem. According to Verick (2009), more than 150000 fulltime jobs had been lost in the first two years since the 2008 financial crisis in the country. However this does present an opportunity for M&S to enter the country and create more employment opportunities.

Economic Conditions

First and foremost, it is noted that the Canadian economy is among the largest worldwide. Canada is a member country of the OECD and G8 with a GDP of USD 1825.10 billion in the year of 2013, which accounted for 2.94 per cent of the entire world economy (Trading Economics, 2015). The Canadian agricultural industry is a major supplier in the world, especially for the products of wheat, grains and red meats. In addition the dairy sector is also an important element of the Canadian agriculture. In the year of 2010, the total value of the dairy sector was recorded at USD 13.7 billion. Aside from the large quantity, Canadian dairy products are also famous for their high quality which is indicated by the 100 per cent Canadian Milk symbol (Young et al., 2010).  

The presented information is relevant to M&S planned business operation in Canada. This is due to the fact that as a food retailer, the company will need to rely on working with high quality suppliers to ensure its services to the customers (Rong et al., 2011). There is the clear opportunity for M&S to establish a local supply chain system with the Canadian farmers to not only ensure the quality of its product, but also to optimise its operational cost in the new market.

Social Environment

Overall the Canadian society has experienced steady growth in terms of the national population in recent years. Apart from natural population growth, immigration has contributed largely to this trend. On the other hand, as a developed country, the population in Canada is becoming increasingly ages which is similar to many other developed countries including the UK. The country has two official languages which are English and French. In particular more than 98 per cent of the population speaks English (Heller, 2008). This means that M&S will have no difficulty in this aspect when it enters the market as almost all of its marketing communications needs very little work to adapt to the local condition.

On the other hand, the Canadian culture is often described as being very liberal and diverse. There are many different cultural backgrounds in the country, which is a situation similar to that of the UK (Krahn et al., 2010). As a result M&S can further benefit from such social similarities and is under little pressure to localise its operation in Canada. In fact, the Canadian culture had been greatly affected by the British culture in its history (Banting and Kymlicka, 2010) and this link between the two countries will certainly help M&S to establish in the new market.  

Technological Factors

In terms of technological factors, two facts stand out which both present positive impacts for M&S to operate in the Canadian market. Firstly being a developed and highly industrialized country, Canada has very advanced infrastructure which facilitates efficient supply chain systems for all types of business operations (Pomfret, 2013). For M&S in particular, the company can expect to establish a local supply network thanks to such good conditions. According to Hajibabai and Ouyang (2013), effective modern supply chain typically depends on a reliable infrastructure to facilitate activities such as inventory management, distribution and transportation.