Marks & Spencer in China: To Stay or Leave?
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?