Managing Inter-Organisational Relationships in an International Setting: A Case Study of Marks and S

The purpose of this assignment is to assess the extent to which you have achieved Intended Learning Outcomes 1 through 4. It gives you an opportunity to examine the critical challenges, tasks and approaches associated with the management of inter-organisational relationships in an international setting and develop relevant skills. The inter-organisational relationships under consideration range from supply networks to strategic alliances that are embedded in local, regional, international and global
systems. You can draw on a number of disciplinary perspectives that make use of the dominant notions of supply chains, networks and markets for the analyses of inter-organisational relationships and problems.

1. Critically evaluate a range of concepts and theories concerning inter-organisational relationships in an international context;

2. Apply appropriate analytical frameworks, models or concepts for the analysis and evaluation of the relationships and networks of a specific organisation;

3. Apply appropriate analytical frameworks, models or concepts for the analysis and evaluation of the relationships and networks of a specific market;

4. Develop strategies for managing the relationships and networks of a specific organisation.

Set up 136 years ago, Marks and Spencer (M&S) is the UK's biggest fashion retailer, with annual clothing sales of over £3 billion (M&S 2019; Wood 2019a). Despite its illustrious history and three years of restructuring under its latest CEO (Mr Steve Rowe), some analysts have described the company as facing an existential crisis (Eley 2020; Wood 2019b).

Its sales have been falling for the past 7 years, its market share of the UK clothing market has shrunk from around 11% in 2004 to 7% in 2019, and according to its own Chairman, Mr Archie Norman, the company has been metaphorically drifting for more than 15 years on a "burning platform" (Wood 2019a, 2019c). In 2019 its share price had dropped by over 26% (FT 2020), and to add insult to injury, it was booted out of the prestigious FTSE 100 index for the first time in its history (Wood 2019b).

The reasons cited for this situation are multiple and complex. Traditional high street retailing has been under pressure around the world for some time, not only in the UK, there being even talk of "the death of the high street," due to rising real estate costs, increasing competition from fast fashion and online retailers (such as H&M, Zara and Primark), and changing habits and tastes of shoppers (Evans 2019; Wood 2016, 2019). M&S has also been accused of targeting the wrong customer segments and mismanaging its inventories and supply chains (Wood 2019b, 2019c). M&S is not only a UK retailer.

Rationale

We have more than 428 wholly-owned, jointly-owned or franchised stores across 56 markets in Europe, the Middle East and Asia – along with a growing online presence in markets like Australia and the US. We're also looking to capitalise on our larger franchise
and joint venture territories like India and Hong Kong, and take advantage of our growing international operating profit. (M&S 2020)

Nevertheless, the company's history of internationalisation strategy can hardly be described as smooth sailing and a story of resounding success. One analyst referred to it as "a chequered saga of international expansion and retrenchment dating to the 1970s," with successive CEOs entering some of the world's largest markets, such as the USA, only for a subsequent CEO to withdraw from them, despite the fact that M&S's competitors have found ways to succeed in those very same markets (Farrell 2016). One of M&S's most recent high profile internationalisation failures was their entry into the Chinese market in 2008, only
to completely withdraw by 2017 (Hancock 2017).

Given M&S's difficulties at home, Mr Paul Friston, International Director of M&S, was given the task of reconsidering the company's strategy towards China, the world's biggest consumer market. As part of this effort, he has appointed you as an external consultant to advise him on M&S's re-entry to China, by developing a new market-entry strategy for the Clothing & Home part of the business only (thus excluding M&S Food), the main product departments of which consist of Womenswear, Menswear, Lingerie, Kidswear and Home (M&S 2019).

Mr Friston has narrowed down his options by wanting to use either franchising or a joint venture as an entry-mode strategy. He would like you to select one of these entry-modes and advise him on how to position M&S Clothing & Home in the Chinese market, how to position the company within relevant Chinese and global supply networks, and how to manage collaboration with relevant Chinese partners, to support its entry.

Carry out the following tasks in a max. 3000-word typewritten individual report. The aims of this report are twofold: 1) to advise M&S's management team on how to re-enter the Chinese market with the Clothing & Home product portfolio using either franchising or joint venture as entry-mode strategies, and 2) to critically evaluate the theories and concepts you have used to complete aim 1).

1. Analyse and evaluate M&S's existing supply networks and strategies. [ILO 2]

2. Analyse and evaluate the supply network of the global apparel industry and market. [ILO 3]

3. Analyse and evaluate the supply networks of China's apparel industry and market. [ILO 3]

1. Formulate a market positioning strategy for M&S's entry into the Chinese market:

What products and/or services should M&S sell in China, to which customers (market segments), under what brand(s)?

2. Formulate a supply network strategy to support M&S's entry into the Chinese market:

How should M&S position itself within the Chinese and global apparel supply networks?

3. Formulate a collaboration strategy for M&S's entry into China:

How should M&S manage its collaboration with Chinese partners?

Critically evaluate the theories and concepts you have used in completing Tasks I and II, justifying your choices:

What were the strengths and weaknesses of the theoretical perspectives and analytical tools you have used? Why have you decided to use those and not others?

There should also be a very short introduction to the report, stating its purpose (included in the 3000-word count limit). (An executive summary and a conclusion are not required.)

The use of visual representation (such as diagrams, maps etc.) to effectively communicate complex ideas is encouraged.