retail internationalization and retail failure: issues from the case …€¦ · ·...

Retail internationalization andretail failure issues from thecase of Marks and Spencer

SL Burt K Mellahi TP Jackson and L Sparks

Abstract

Retail internationalization has attracted much attention in recent years as the scale andnature of the activity has changed Most analysis of retail internationalization howeveris based on market entry and mainly successful businesses Here the internationaliza-tion strategy of Marks and Spencer over 30 years is examined Its recent large-scalewithdrawal from such activity is considered in the light of theories about inter-nationalization and business failure The complexity of market exit in retailing isemphasized It is suggested that market exit and failure are important under-researched dimensions of retail internationalization More detailed and careful workon market entry and withdrawal (failure) is needed to adequately conceptualize thesubject area

Keywords

Failure internationalization market entry Marks and Spencer retail with-drawal

International expansion has been the graveyard of many prominent UKretailers and none more so than Marks and Spencer Now it must extricateitself from the businesses around the world that have never ful lled itshopes(Urry M lsquoOverseas expansion has been retailerrsquos graveyardrsquo 30 March 2001

ftcom)

Introduction

On 29 March 2001 Marks and Spencer (MampS) announced that it was to sell itsBrooks Brothers clothing chain (USA and Japan) and Kings supermarkets(USA) businesses and turn its company-owned stores in Hong Kong into afranchise In addition it was going to close most of its company-owned

SL Burt L Sparks Institute for Retail Studies University of Stirling Stirling FK94LA UK e-mail leighsparksstiracuk K Mellahi Loughborough UniversityLoughborough UK TP Jackson Coventry University Coventry UK

The International Review of Retail Distribution and Consumer ResearchISSN 0959-3969 printISSN 1466-4402 online copy 2002 Taylor amp Francis Ltd

httpwwwtandfcoukjournalsDOI 10108009593960210127727

Int Rev of Retail Distribution and Consumer Research 122 April 2002 191ndash219

continental European stores viewing them as lsquodistractionsrsquo in its quest to restoreits fortunes (which have seen sales stagnate since 1998 pro ts (after exceptionalitems) fall by over pound1bn in three years and its share price collapse from a highof pound660 on 3 October 1997 to a low of pound170 on 20 October 2000) A wave ofprotests across continental Europe about the closures and job losses was theresult This lsquomanagerial giant of the western worldrsquo (Drucker 1974) and lsquoone ofthe best managed companies in the worldrsquo (Tse 1985) found its closureannouncement condemned by the French Prime Minister Lionel Jospin aslsquoparticularly unacceptable (they) should be punishedrsquo Other French minis-ters weighed in with comments on the lsquoscandalrsquo and lsquoexceptionally brutalbehaviourrsquo of the company In early April 2001 a French court ned MampS forbreaking the law through a lack of consultation with its workers (they claimedthey were effectively sacked by e-mail) and its lsquomanifestly illegal trouble-makingrsquo suspended the store closures and threatened prosecutions of individualMampS managers Demonstrations and protests continued in the summer of 2001including a rally and march in London organized by the global skills andservices union UNI Rather ironically one analyst report (Dresdner KleinwortWasserstein 2001) described the announced restructuring as the lsquoeasy bitrsquo ofturning MampS around

Whilst much attention has rightly focused on the rights of employers to act asthey see t and employees to be consulted and informed properly the announce-ment by Marks and Spencer was signi cant for another reason It signalled anend to the international ambitions of successive MampS chairmen and Boards ofDirectors Whilst some international store activity will remain mainly in theform of franchised shops most company-owned activities will be sold off closeddown or franchised So ends over 30 years of direct retail international activityand ambition MampSrsquos internationalization could perhaps be viewed as aninglorious failure Given the current level and scale of international retaileractivity (eg Ahold Delhaize) and takeovers at the international level by leadingretailers (eg Wal-MartAsda and CarrefourPromodes) Marks and Spencercan no longer be considered a candidate for the lsquoglobal retail elitersquo Rather it is ghting for its independent life in its British heartland Whiteheadrsquos (1992 41)challenge (lsquoto become the major international retailer with products whichsell worldwidersquo) has not been met

The phenomenon of previously successful companies facing a survival crisis isnot new (Miller 1990 Lawler and Galbraith 1994 Anheier 1999) The corporatelandscape is littered with the bones of bankrupt but previously successfulcorporations Several popular books describe collapses of successful companies(eg Ross and Kami 1973 Ricks 1983 1999 Miller 1990 Sobel 1999)Notwithstanding the commercial importance of organizational failures both atthe corporate and business start-up levels the topic however is not a centraltheme of management research (Cameron et al 1988 Whetten 1988 Sheppard1994) Pauchant and Douville (1993) argue that whilst excellence is well-established within the literature on strategy (and indeed MampS have beenincluded themselves in a number of lsquoexcellencersquo collections) the study of failureor market withdrawal is generally less common (though for a recent retailexample see Meyer-Ohle 2002)

If organizational failure is not a central theme in management research thenthe idea of failure in retail internationalization research hardly registers at all

192 The International Review of Retail Distribution and Consumer Research

Recent years have seen a torrent of research publications on internationalizationThere are for example the edited or collected volumes of Brown and Burt(1992) McGoldrick and Davies (1995) Akehurst and Alexander (1996) andAlexander and Doherty (2000) and the books of Sternquist and Kacker (1994)Alexander (1997) and Sternquist (1998) Reading these works however bring upconcerns with the way in which internationalization theory has been developedand outlined in the literature (see Alexander 1997 for a sound run-through oftheory development) The literature is replete with metaphors about growth ininternationalization whether it be stages or development theory waves ofinternationalization retailers being cautious or ambitious over activity emphaseson competences or critical activities such as in Dunningrsquos eclectic paradigm orconcepts such as psychic distance If failure in retail internationalization hasbeen considered at all it is under the guise of cross cultural factors such asadaptability entry mode and locational disadvantage Whilst it would be unfair toclaim that risk in retail internationalization has been ignored totally the myriadof failures in retail internationalization practice seem curiously at odds with themainly positive statements suggested by the academic literature

This lack of consideration of failure in retail international activity may beattributed to a number of elements First what is seen lsquoon the groundrsquo today isthe positive outcome of the international activity It is possible to either forget orfail to record activities that close down Godley and Fletcher (2001) demonstratethe historical volume of internationalization into the British retail sector buttellingly comment that one reason why this has been ignored is because so manyof these developments failed or were taken over Second retailers themselveswipe failed activities from their record books or public memory For example youwill nd little mention of Tescorsquos rst foray into Ireland (see Lord et al 1988) inany of that companyrsquos brie ngs on company history its web pages or in the booksproduced recently by those involved (MacLaurin 1999) Yet lessons were learntfrom this problematic venture which have subsequently informed the companyrsquosinternationalization approach and return to Ireland This corporate amnesiaprobably re ects the fact that failure is not such an attractive construct assuccess There are many such examples involving both high pro le and lesser-known companies For example Wal-Martrsquos struggles in the 1990s in HongKong Indonesia and China or Lane Crawfordrsquos disastrous move into Singaporeare seemingly forgotten or ignored by retailers and academics Finally research-ing failure is generally more dif cult than researching success partly for thereasons above and partly because personnel change more rapidly after failure andneither they nor the artifacts remain to inform us

However it is believed that a combination of failure and internationalizationcan provide insights into both constructs and theory development Why docompanies lsquofailrsquo in the international market Why are decisions in retrospectdisastrous How can businesses extricate themselves from problems What arethe roles of other stakeholders The aim of this paper is to use MampS as a caseillustration to probe these issues Its international activity is long-term anddiverse It has been a hugely respected business though currently it can notseem to put a lsquofoot rightrsquo It is believed that an analysis of its failure ininternational arenas is both long overdue and may well prove insightful

The research presented here is part of a larger piece of work on organizationalfailure in MampS (Mellahi et al 2002) The overall research design focused on

Burt et al Retail internalization and retail failure 193

using a range of sources to enable breadth of data capture augmented bydetailed depth research processes with cross-checking and validation of dataopinions and sources Here the focus is only on the international activity of thebusiness though the same data sources have been used as in the widerresearch

First the media and stockmarket analyst coverage of MampS has been enor-mous because of their high pro le previous success and the depth of theunfolding crisis For example the Dresdner Kleinwort Wasserstein (2001) reportcited earlier is one amongst many analystrsquos reports on the company Secondarymaterial is thus extensive

Second MampS corporate publications such as annual reports are readilyavailable These have been considered together with other public statements byMampS managers and directors available through the press or made for example atthe Annual General Meeting (which has been attended regularly by one of theresearch team)

Third for the overall project 12 formal interviews were conducted over aperiod of six months in 2000 with a sample of managers executives andDirectors (see Mellahi et al 2002 for full details) Whilst the interviews focusedon general issues of crisis development and management at MampS commentsabout internationalization were made

Finally since 1998 one of the authors a former executive at MampS andpersonally involved in aspects of MampS internationalization has conductedinformal interviews and discussions with MampS management about MampS activ-ities utilizing his past contacts and colleagues Most of these informal discus-sions have been by telephone and have sought to cross-check information as itemerged from the research

The paper is structured into ve sections First the literature on retailinternationalization research is presented followed secondly by examination ofthe concepts of failure or market exit A description and then discussion ofMarks and Spencerrsquos international activity follow this Finally conclusions aredrawn both about Marks and Spencer and the lessons from the case for ourunderstanding of failure and internationalization

Retail internationalization

International activity is inevitable the subject area is concerned withexplaining the directional or motivational issues associated with thatprocess

(Alexander and Myers 2000 340)

Retail internationalization as noted earlier has become the subject of muchacademic study Our understanding of the issues involved has undoubtedlydeveloped in the last decade but questions remain Alexander and Myers (2000)criticize those working in the subject for being overly concerned with processand insuf ciently worried about the pre-conditions for internationalizationTaking a broader but similar position Wrigley (2000b) questions the ability ofexisting theorizing to suf ciently include the factors that are important in thecorporate landscape and the ways in which these vary over time These broad


linkage-type issues can themselves be set within a framework of concern aboutretail internationalization research which has perhaps four dimensions (Dawson1993 1994 Pellegrini 1994)

First there is an over-concern on describing what happens in retail inter-nationalization Research has become very adept at describing the opening ofstores and the countries that any company has penetrated Listings of countriesare then somehow related to degrees of internationalization Alexander andMyers (2000) argue that this descriptive work whilst of interest and necessary asa basis is insuf ciently grounded in the pre-conditions of markets in thecountries concerned Wrigley (2000a) states that the descriptions are notsuf ciently cognizant of the corporate and nancial realities of rm and globalcapital Both points have merit in that the description of store openings per sedoes not tell us the full story about internationalization but is probably thenecessary starting point

This paper however wishes to make a different point about this work Byfocusing on stores opened and countries entered it is argued that the research ismissing an essential component of the internationalization process namelyfailure Adding up countries entered tells us something about a companyrsquosinternational lsquoreachrsquo Focusing as well on the relationships between countriesand locations (stores) that have been exited and the reasons behind closures orwithdrawals may however tell us more about the activity process companyrealities and the pre-conditions in target markets for retail internationalization

Second there has been a debate about the very scope of retail inter-nationalization Dawsonrsquos (1993 1994) framework lays out a very broad range ofactivities in which a retailer may engage all of which may have internationaldimensions Sternquist (1997) has challenged this approach suggesting thatstore operations alone should be the prime focus for international retailingresearch This debate continues (see Alexander and Doherty 2000 for anexample) At its extreme Dawsonrsquos suggestion helps us to situate the retailbusiness in the activities it undertakes similar in a way to Wrigleyrsquos (2000a) callto understand the nancial dimension to retail internationalization Howeveradding product sourcing nancing management movements and the like doesexpand the dimensions to be considered and perhaps limits our ability toproceed other than on a detailed case by case basis (Sparks 1995 2000) It alsohighlights the important and obvious (but sometimes ignored) point that retailinternationalization is multi-faceted and complex

Third the literature is full of references to aspects of theories that have beenborrowed from other sectors This debate again has been joined by Dawson(1993 1994) and Sternquist (1997) and commented upon by others (egAlexander and Doherty 2000) In essence Dawson cautioned about borrowingtheories unthinkingly from research in other sectors when retailing is such adifferent activity to those other sectors The nature of retailing and the practiceimportance and meaning of its internationalization are for example vastlydifferent to an oil producer or a water company But the retail literature isreplete with such borrowings particularly from manufacturing research andgenerally focused on aspects of growth of internationalization (see Alexander1997 Sternquist 1998 for good run-throughs of this work) The reasons forinternationalization and the reasons behind entry and withdrawal are it can be


argued fundamentally different in retailing and need to be considered in thisdifferent light

It is also generally the case that such broad theory development emphasizesestablishment over all other factors It may become more concerned somewhatwith pre-conditions for entry but it is still market entry that appears to be thecritical dimension As may be expected it is argued that considering failure (ormarket exit) in retail internationalization might also be important For exampleresearch has covered Kmartrsquos entry into Eastern Europe as it has the morerecent entry of Tesco However the exit of Kmart which provided opportunitiesfor Tesco tends to be neglected What were the motivating factors for this exitand what can the comparative actions of these companies tell us Such issues areneglected in the literature although Dawson (2001) has begun to questionwhether retail internationalization is the outcome of a clear cut rationalestrategic planning process or rather an lsquoopportunisticrsquo event (see Lord et al1988)

Fourth the vast majority of academic research on retail internationalization isgrounded in the present There are few studies that present a longitudinalanalysis of events or consider the historical context Those that do examine theprocess of retail internationalization over time ndash either with respect to speci cretail sectors (Burt 1991 1993 Godley and Fletcher 2000a 2000b) or individualcompanies (for example Laulajainen 1991 1992 Treadgold 1991) ndash again tendto focus on entry methods patterns of investment market entry and growthThis context also tends to focus on discussion of past actions with current (andpossibly uninvolved) decision makers even when exploring motives for previousinternationalization (Alexander 1990 Williams 1992) Discussion of futureintentions (Myers 1995) also tends to focus on current plans for expansionrather than any retrenchment

There has been a considerable expansion of academic work and literature onretail internationalization This work is however problematic in a number ofways In particular and in the context of this study the literature tends tounderplay the merits of taking a longitudinal case based approach grounded inthe business and corporate realities of the time It also has little to say aboutmarket exit or failure in international retailing despite the multitude of examplesavailable from practice This case study aims to explore these issues to help beginbuilding a broader understanding of retail internationalization The paper nowturns to the literature on failure and market exit

Failure and market exit a review

It has to be recognized at the outset that the terminology in this area is inexactA number of terms or phrases are used in the literature but rarely are theyde ned How they relate to each other is also often unconsidered Thus forexample failure closure exit divestment or disinvestment could be examinedThere is internationalization so why not de-internationalization Closure of abusiness by one company can mean the opportunity to move in to a market foranother Hinfelaar and Kasper (2001) note lsquothe failed internationalizationstrategy of one retailer becomes the vehicle for market consolidation foranotherrsquo There are clearly issues to be resolved in our basic de nitional


apparatus The terms closure failure or exit will be used interchangeably in thepresent exploratory research although it is recognized that there will have to betheoretical debates about these In this exploratory work it is believed that thisbroad approach is the most useful to allow investigation of the subject

There is also an issue over what is being studied and at what level There isa long history of research on macro changes in the retail shop stock at variousscales (Converse 1932 Burd 1941 Kirby and Law 1981) Research also coversthe idea of market entry and exit at the macro-economic level (see Carree andThurik 1996 Nijkamp et al 2001 for discussion of this) Debates about businessformation are plentiful and indeed some countries have focused their economicpolicies on ensuring a conveyor belt of new concepts ideas and businessesThese business start-ups of course succeed or more likely fail This raises thequestion of predicting business failure and attempts have been made to improvepredictive accuracy including for retail failures (McGurr and DeVanay 1998)

More pertinent in the current context however is the work at the corporatelevel although as seen above these do not normally cover concepts of failure Anexception to this can be found in some of the case study work particularly thaton methods of market entry (Quinn 1996) or on structural change (Sparks1996a b) Such case study speci c work has on occasions considered in passingsituations where withdrawal from an international market has occurred (Sparks1995) Recently Alexander and Quinn (2001) have used three brief companyexamples to examine what they term divestment in retailing

There is also a question of what exactly is the focus of any such study Thediscussion above focuses on the rm as the object of study As noted earliersome would argue that internationalization is about more than opening shops inanother country It is necessary to decide whether the focus of study of failure isat the rm outlet or activity level (or all of these) In retailing for example highpro le international management moves that have been failures can be pointedto for example the sequence of Americans brought in to lsquorescuersquo Laura AshleyFailures of supply systems or withdrawal of sourcing from countries is anotherexample as are international nance movements and their implications for thefunding (or not) of international activity It is necessary to be clear whendiscussing failure or exit that it may be highly complex and inter-related andextend beyond ideas of shop opening or closing

It is possible to relate our study of retail international failure to the broaderliterature on business failures (see Mellahi et al 2002 for a longer discussion)Causes of organizational failure have been examined from at least two differentperspectives The Industrial Organization (IO) perspective locates the causes offailure in the external environment (Lippman and Rumlet 1982 Frank 1988Jovanovic and Lach 1989) This perspective emphasizes external constraints andimplies that forces of circumstances leave senior mangers with very little roomfor maneuver Managers have little strategic choice but to withdraw frominternational activities because of events beyond their control or for rationaleconomic reasons Put differently senior management of failing rms are theunfortunate victims of external circumstances and that failure does not implymanagement ineffectiveness or inef ciency This deterministic role of theenvironment implies that the management role can therefore be ignored whenexamining strategic decisions such as international withdrawal The IO literaturesuggests instead a range of primary causes of crisis and decline These include


turbulent demand structure due to brand switching changes in consumer tastesor cyclical decline in demand strategic competition due to rivalry amongexisting competitors or new entrants (Lippman and Rumlet 1982 Frank 1988Jovanovic and Lach 1989 Baum and Singh 1994 Sheppard 1995) density oforganizations and the natural selection process (Aldrich 1979 Aldrich andPfeffer 1976 Campbell 1969 Hannan and Freeman 1978 Aldrich 1979 Ambur-gey and Rao 1996) strong unexpected environment jolts (Meyer 1982) andtechnological uncertainty due to product innovations and process innovations(Slater and Narver 1994)

It can be argued that organizational failure is a natural and objectivephenomenon (Balderston 1972) inherent to the ef cient operation of marketsLife cycle theory (LCT) argues that organizations follow the path of

Inexorable and irreversible movement toward the equilibrium of deathIndividuals family rm nation and civilization all follow the same grim lawand the history of any organism is strikingly reminiscent of the rise and fall ofpopulations on the road to extinction(Boulding 1950 38 see also Downs 1967 and in the retail context Davidson

et al 1976 among others)

This cycle of development and vulnerability is also at the heart of the wheel ofretailing (Hollander 1960) which is based on the notion that organizationscommence as low costlow price businesses but that as the business develops soit lsquotrades uprsquo and adds services ambience and other more expensive attributes Ittherefore becomes vulnerable to leaner newer entrants which offer shoppers thelower prices they seek Inherent in the wheel of retailing are concepts of changeoccurring in the environment (external) but also concepts of managementseparation from consumer realities leading to an inability to respond to threatsto the business Whilst not universally accepted the concept of cyclical trends ortendencies that need to be managed or overcome is an attractive one This leavesopen however the question of whether failure is due to these external factors orto management failure

On the other hand Organizational Studies (OS) literature takes a voluntaristicperspective and places more emphasis on internal factors associated with failure(Cameron et al 1988) Accordingly and in sharp contrast to the IO literatureexamined above this approach assumes that management does in uence thestrategic path of organizations including market withdrawal and failure Ad-vocates of internal causes criticize IO literature on failure as being too rationalarguing that it presumes objectivity by ignoring the effects of internal factorsand the misperception of organizational members in responding to externalchanges According to OS literature failure is a result of managementrsquos lack ofvision and the lack of will and ability to respond effectively and make necessaryadjustments to reverse the downward spiral of decline triggered by externalfactors The literature cites as the main internal causes of a crisis escalatingcommitment by management to pre-existing strategies and routines (Staw 1981Bateman and Zeithaml 1988) blinded perception by management to theirweaknesses and strengths customersrsquo demands and competitors (Zajac andBazerman 1991) management malfunctioning (Argenti 1976) strategic paralysis


(DrsquoAveni 1989b 1990) threat rigidity effects (Staw et al 1981) and structuralinertia (Hannan and Freeman 1984)

The discussion above suggests that both IO and OS orientations need to beincorporated in any consideration of retail lsquode-internationalizationrsquo A number ofprevious attempts have been made to integrate the two approaches (Levine 1978Witteloostuijn 1998) These however have not tended to be developed in thecontext of either retailing or internationalization

A further strand in the wider literature on lsquofailurersquo is the work on divestmentand particularly the divestment of activities in an international context Benito(1997) shows that divestment of foreign manufacturing operations is commonand is related to the economic growth in the host country the mode oforganization (subsidiary or green eld) and the closeness of the operation to thecore business activity This is reinforced by Chang and Singh (1999) whoconclude that whilst the entry and exit mode decisions are dependent ondifferent factors the mode of exit is strongly related to the original mode ofentry Clark and Wrigley (1997) produce a typology of exit decisions de ningthree main types strategic reallocation restructuring and changed corporateform and structure and moving from the simple to the complex As Baroncelliand Manoresi (1997) show in a retail context however there are complicationswhich make simple typologies problematic They point to a retail divestment ofcompany stores into a franchise commenting that this is classically an asset-shrinking exercise but in this case is undertaken for enhanced speed of growthreasons

The literature reviews of retail internationalization and failure and exitsuggest therefore that both are somewhat complex and problematic areas ofstudy There are de nitional conceptual and level of analysis dif culties thatneed to be clari ed and resolved Any research at this stage is thereforenecessarily exploratory in nature One way of approaching this is by utilizing acase study to examine some of these issues and to suggest from this aspects ofretail internationalization lsquofailurersquo that could be more fully analysed and re-searched and thus help in theoretical development

MampS internationalization

Prior to its current decline MampS had been one of the most successful Britishretailing companies Figure 1 takes the simple measures of sales and pro t toillustrate the commercial success of the company and the scale of the currentreverse There is no point in repeating here the well-known history of thedevelopment of MampS from its family market bazaar xed price origins Anumber of erudite texts by outside observers (Briggs 1984 Tse 1985 Rees 1989)company leaders (Sieff 1970 1986 1990) and internal of cers (Bookbinder 19891993 Goldenberg 1989) provide more than enough detail In addition there aredetailed (Bird and Witherick 1986) and more super cial (Davies 1999) academicattempts at exploring aspects of the companyrsquos development Others havefocused on speci c strengths or presumed characteristics of MampS (Tse 1989Kumar 1997 Turnbull and Wass 1998) and how other sectors of the economycould learn from their business practices (Howells 1981 Chesterman 1984) Therecent decline of MampS has also attracted wide media comment (Retail Week


2001) and the rst journalist authored book on the decline has already beenpublished (Bevan 2001)

Such was its domestic image and success that MampSrsquos moves abroad hadbecome of interest to academics searching to understand the role of image inretailer internationalization (McGoldrick and Ho 1992 McGoldrick and Blair1995 McGoldrick 1998 Burt and Carralero-Encinas 2000) One particularaspect of its approach to internationalization franchising has also been the focusof study (Whitehead 1991 1992) MampSrsquos iconic status within the UK maysometimes have puzzled those from outside the country However by 1998 thebusiness had retail sales of almost pound8bn traded from almost 500 MampS stores inover 30 countries and owned Brooks Brothers and Kingrsquos Supermarkets in theUS It possessed a renowned private labelretailer brand in St Michael anenviable UK nancial services operation and made over pound115bn pro t beforetax By any measure this was a successful business Two years later however thislsquoempirersquo was in nancial and prestige terms and for a number of reasons ingreat dif culties (Goodman 2000 Bevan 2001 Mellahi et al 2002) By 2000

Figure 1 Marks and Spencer recent business performance


international activities represented 25 percent of the companyrsquos retail oorspace172 percent of its retail (ie not nancial services) turnover but less than 125of the pre-tax pro ts Even in its most pro table year (1997) this pre-tax pro tpercentage was only 83 percent Thirty years of international retail store activityhas not produced the returns anticipated

There are a number of ways in which MampSrsquos internationalization can beconsidered as it has varied over time Dimensions of entry method timedestination and format all are important The discussion below provides a basechronology for the international activity before considering details of formatentry and subsequently exit Table 1 supports this discussion by outliningmeasures of MampSrsquos internationalization at ve yearly intervals It shows clearlythe development of the company both within the UK but also in terms of itsinternationalization Table 2 provides details of where and how the companycurrently (September 2001) operates

Marks and Spencer for a long time had an established export business thatexported product around the world to lsquoappropriatersquo retail partners and on veoccasions the company was the recipient of a Queenrsquos Award for Export for this

Table 1 Marks and Spencer Business Development 1975ndash2000a

1975 1980 1985 1990 1995 2000Turnover(poundm ndash current prices)UK 687b 1543 2900 4765 5596 6483Europe 9b 28 80 120 360 556USCanada 70 175 579 544 691Rest of Worldc 26b 26 38 63 171 101Financial services 19 81 136 364Total 721 1667 3213 5608 6807 8195

Floorspace (000 sq ft)UK 5712 6374 7216 9225e 11000 12265Europe 53 154 266 325 Na 1517USCanada 1881 2304 3895f Na 1421Rest of World 223Franchises 959Total 5765 8409 9786 13445h 13794h 16485StoresUK 252 251 265 292e 283 296Europe 2 5 9 11 29 40USCanada 190 227 376g 320 328Hong Kong 7 10Franchises Na Na Na Na 73 115Total 254d 446d 501d 679d 712 779Notes(a) The data reported by the company changed often in the reporting period andterminology is somewhat loose in their reports It is best to treat the table as estimatesand tendencies therefore (b) Estimated (c) Initial years re ect the export business lateryears Hong Kong plus franchises (d) Franchise store numbers excluded as unknown (e)Includes Republic of Ireland stores and oorspace (f) Includes stores in the Rest ofWorld (g) Includes Hong Kong stores as well and (h) Excludes franchise store oorspaceSource Constructed from company Annual Reports and Accounts


(and its franchising) activity Rees (1969) comments that even in the 1960s thisexport business involved sending products to over 50 countries The expatriateand military (NAAFI) markets were the focus of this business but othercountries were involved This business grew substantially in volume over the1970s but was always subject to the vagaries of import bans and international

Table 2 Marks and Spencer group locations (at 30 September 2001)

Marks and Spencer Marks and Spencer franchisesNumber of stores Number of outlets

United Kingdom310 includes 8 outlet centres Bahrain 1

Bermuda 1Belgium 4 Canary Islands (5)France 18 Gran Canaria 3Luxembourg 1 Tenerife 2Netherlands 2 Channel Islands (4)Portugal 2 Guernsey 1Republic of Ireland 4 Jersey 3Spain 9 Croatia 1Hong Kong 10 Cyprus 8TOTAL 353 Czech Republic 3

Finland 6Gibraltar 1

Marks and Spencer Direct 1 Greece 28Hungary 4Indonesia 9Israel 6Kuwait 1Malaysia 3Malta 3Philippines 9Poland 1

UK Regional Stores Qatar 1England 268 Romania 1N Ireland 7 Singapore 6Scotland 22 South Korea 5Wales 13 Thailand 10

Turkey 11UAE 2TOTAL 130

Brooks Brothers Brooks Brothers franchisesNumber of stores Number of storesBrooks Brothers USA 155 US Airports 4incl 79 retail stores 75 outlets 1 clearance Hong Kong 5Brooks Brothers Japan 65 Taiwan 2TOTAL 220 China 1

TOTAL 10

Kings Supermarkets Group Worldwide LocationsNumber of storesUSA 27 TOTAL 750

Source httpwww2marksandspencercomthecompanydownloadsstore_informationindexshtml (downloaded 12th November 2001)


trade lsquowarsrsquo Export sales outside the group (Table 3) had reached pound35 millionby 1978 before trade embargoes various wars eg Nigeria the Iranian Revolu-tion and exchange rate problems pegged back growth Nonetheless it would bewrong to characterize the pre-1970s MampS as a wholly UK business as manypreviously have Indeed as Table 3 shows this export business provided not onlyimportant sales opportunities but also valuable pointers towards areas of businessopportunity Some of the partners were transformed formally into franchisees asinternationalization activity strengthened (see below) As Finlan (1992 58) noteslsquoExport of goods enabled the business to establish a series of good personal andbusiness relationshipsrsquo

This export business took a variety of forms and depth of agreement Forexample MampS had an agreement with Isetan to sell products in Japan between1970 and 1978 after which Daiei became the partner in a wider agreementinvolving managerial know-how and technology transfer It is not known to uswhy one partnership ended and another began For other countries there was inessence a wholesale operation targeting retailers and trying to expand salesSome relationships were simply entrepreneurial in the export context eg anIndonesian entrepreneur buying $15m of goods in 1990 for resale in Jakarta Asa consequence he became the Indonesian franchisee a couple of years later Some

Table 3 Export sales (poundm ndash current prices)

Year Total exportsDirect exportsoutside group Of which

Europe America Africa Far East1977 404 2431978 532 3511979 440 2551980 467 2631981 476 2231982 580 265 140 22 59 441983 679 276 156 31 32 571984 840 332 183 22 52 651985 927 382 195 48 76 631986 1063 448 256 64 48 801987 1151 450 278 60 24 881988 1261 465 340 50 25 501989 1254 458 370 34 18 361990 1360 493 396 32 13 521991 1640 590 473 29 13 751992 Na 627 500 127(a)1993 2322 733 576 1571994 2808 872 668 2041995 3398 998 694 3041996 3816 1148 816 3321997 4585 (b)1998 46961999 4402

Notes(a) From 1992 direct export sales reported as Europe and Rest of the World (b) From1997 direct exports incorporated into new geographical reporting structureSource constructed from company Annual Reports and Accounts


deals were made for locations eg Panama that served as a staging post for othercountries eg elsewhere in South America The full details of all this activity arenot in the public domain but as Finlan (1992) points out it was not allbene cial except in total sales terms There was no control no contracts in somecases variable standards and inconsistent brand presentation Across the worldMampS product was sold in a variety of guises and situations not all re ectingpositively on the company

This export activity to a considerable extent held little developmentalattraction Export sales have declined in importance as this business haswithered or been converted (Table 3) Some of the better opportunities fordevelopment were formalized in franchise agreements as for example in Greeceor in island communities such as Jersey Malta and Cyprus or elsewhere as inPortugal Other markets were left to their own devices Long-standing partnerssometimes transferred to franchises as with Rustans in the Philippines Otherssuch as Dodwells (Inchcape) in Hong Kong saw their export agreementterminated in 1987 as MampS decided to open its own stores there

The rst formal store-based internationalization occurred in 1972 when astakeholding was purchased in three Canadian clothing retailers The minoritystakeholding was bought out and full ownership assumed when Canadianlegislation changed in 1978 These three chains DrsquoAllairds Peoplersquos andWalkers (the last of which were re-branded as MampS stores) operated as the maininternational activity of the business for some years However this was not a verypro table venture and its fortunes uctuated dramatically (Figures 2 and 3)Despite growing to 275 stores in Canada (an increase of almost 50 percent frompurchase) and even starting a brief DrsquoAlliards excursion into New York State inthe late 1980s MampS never made Canada succeed The store numbers were cutsharply in the 1990s DrsquoAlliards was sold off in 1996 at a loss on disposal ofpound25m and subsequently (1999) the entire Canadian operation was closed at acost of pound25m plus pound24m goodwill write-off Market exit in Canada took anumber of forms over time (stores closed andor relocated stores sold-off andeventually chain closure) but all were basically related to a poor economicperformance of the business

Marks and Spencer entered the US in 1988 through purchases of the up-market clothing chain Brooks Brothers (which also had stores in Japan) andKings Supermarkets a 16 store New Jersey chain As with Canada thisacquisition has never really produced the results expected (Figures 2 3) despitestore expansion of both chains As part of the March 2001 restructuring bothchains are up for sale though in reality bids for the companies have beenencouraged (though have not been forthcoming) for the last two years Thisproposed market exit would seem to be different to Canada as here thebusinesses are pro table and broadly successful Exit re ects perhaps the entryprice paid and thus a failure to meet performance expectations and morerecently a perceived lack of lsquobusiness trsquo

In the 1970s MampS also began an organic market entry strategy in parts ofcontinental Europe (Table 4) The rst store to open (subsequently expandedand at the heart of the 2001 restructuring crisis) was in 1975 at BoulevardHaussmann in Central Paris This was soon joined by a store in BrusselsBelgium In France Belgium and Ireland store numbers grew slowly over the1980s until another wave of expansion in the early 1990s when Spain and the


Netherlands were added to this company owned operation This was followed bya long-awaited entry to Germany in 1996 This corporate store business wasnever dramatically large as the store numbers show or particularly fast-growingbut growth did continue and the business seemed to be solid particularly inFrance and Ireland (another country where the export deal ndash with Dunnes ndash wasterminated in favour of store development) In the late 1990s however storenumbers in Germany and France were cut as problems continued in thebusiness Exit here was therefore initially at the store level rather than thecountry level Europe was not the only part of the international expansion to betotally under central control Perhaps surprisingly Hong Kong stores openedunder corporate ownership in 1988 and expanded rapidly until the economiccrisis in the region in the late 1990s although this expansion was not without itsproblems (Jackson 1998)

The nal strand of the international activity has been franchise stores (Table5) The franchise route has been used in a variety of markets over time Itevolved in the late 1980s largely growing out of a formalization of the existingexport business and driven by a desire to control and manage standards ofpresentation and the wider MampS brand in selected export markets (Finlan 1992)lsquoSt Michaelrsquo franchise stores and shop in shop outlets were present in 16countries by the start of the 1990s and in Annual Reports were publiclyrecognized as a means of expansion in markets not deemed suitable for company

Figure 2 Sales by business component (poundm)NoteSales here are as reported in the Annual Accounts ie at the prevailing exchange rateseach year


Figure 3 Pro ts and losses by business component (poundm)NoteSales here are as reported in the Annual Accounts ie at the prevailing exchange rateseach year

Table 4 Company owned Marks and Spencer store developments Europe and Asia

Year of Number of storesCountry entry 1980 1985 1990 1995 2001

France 1975 3 6 8 16 18Belgium 1975 1 2 2 3 4Ireland 1979 1 1 3 3 4Spaina 1990 ndash ndash 1 5 10Netherlands 1991 ndash ndash ndash 2 2Germany 1996 ndash ndash ndash ndash 2Luxembourg ndash ndash ndash ndash 1Portugalb 2000 ndash ndash ndash ndash 2

Hong Kong 1988 ndash ndash 3 7 12

Total 5 9 17 36 55Notes(a) The Spanish operation appears to have begun as a franchise but was then convertedinto a joint venture with Corte el (80 percent MampS) who were themselves bought outby MampS in April 1999 for pound62m (b) Portugal was a franchise operation but this wasclosed in 1999 with a smaller number of company owned stores opening in 2000Source Annual Reports and Accounts


owned stores in the mid 1990s (effectively non-core Western Europe) The storesare typically much smaller than the UK stores and the lsquocolonialrsquo base of some ofthe export business is easy to identify Some stores have been branded MampSothers St Michael As with all franchise arrangements this venture wassupposedly geared at utilizing local expertize There have been outright suc-cesses (eg Greece) and failures (eg Austria) but in many countries this is nota large operation nor one with huge growth potential (Table 5) In line withexisting academic thought it might be argued that franchising has been used forthe more remote (from the UK) parts of the world (eg Indonesia andThailand) However as Hong Kong was set up as a company operation and therehave been European franchises the strategic reality is more mixed

It is also clear that the choice of partner in each country and the ambitionlevels of and for each partner are mixed There have been problems in a numberof countries necessitating closure of stores or even temporary or permanentmarket exit The Portuguese franchise agreement was terminated in 1999 after arange of problems including nancing and standards of the stores Israel andTurkey are other countries where the partner has changed Austria has closedcompletely Choice of partner and maintenance of standards are key franchisingissues Some partners have multiple countries to run eg Al-Futtaim Sons in theMiddle East and Robinsons in Singapore and Malaysia Other agreements arejoint ventures set up to manage a franchise Hungary is run by an AustrianHungarian partnership whilst Romania is operated by a partnership of theexisting Greek and Turkish MampS franchisees

The details of the franchise agreements are not revealed in Table 5 butobviously affect performance and thus market exit The number of franchisesthat have changed hands or failed to grow is quite striking This could be due toproblems in the franchise partnerrsquos business generally their ability as a retailerto understand the local market and to select appropriate MampS product rangesthe use of varying formats within countries or other essentially internal country-based reasons On the other hand questions could be raised as to the contractfrom MampS in terms of length of time (and thus rate of return) pricing ofproducts at supply and thus consumer levels availability of supply and otherrestrictions on activities Problems in these areas together make it very dif cultto develop franchises pro tability and thus have led directly to store closures andmarket withdrawals It is perhaps signi cant in this regard that the mostsuccessful MampS franchise Marinopoulos seems to have disregarded many of thestandard MampS franchise restrictions A full consideration of such operationaland control issues is beyond the scope of this paper It is suf cient here to notethe impact such issues have on entry performance and withdrawal (Quinn andDoherty 2000)

Table 6 summarizes the exit strategies followed by MampS The table shows thatthere have been a range of both entry and exit strategies used and that there arerelationships between them in that an exit decision can lead to a new entrymode The table also suggests that there are issues about the level of exit egstore or country It is also suggested that there are different reasons behind thedifferent exit strategies reported here and that whilst some of them areeconomic in nature not all of them can be seen in this way It would seem thatthere are linkages between modes of entry and entry decisions and subsequentexit decisions but it is not believed that one is simply a mirror image of the


Table 5 Franchise store operations

Country Partner Entry ExitNumber of stores

1994 1997 2001 Note

Abu-Dhabi(UAE)

Al-Futtaim Sons 1998 ndash ndash 1

Austria Thomas Feldmanthen (1998)Al-Wazzan

1994 2000 2 3 ndash (a)

Bahamas Archie Brown 5 5 1 (b)Bahrain Al-Futtaim Sons 1998 ndash ndash 1Bermuda Tess Ltd 1992 1 1 1Canary Islands Galloway Ltd

(Tenerife) andConfecciones Martel(GC)

by 1988 3 3 5 (c)

ChannelIslands

Le Riche (J) andCreaseys (G)

by 1988 7 4 4 (c)

Croatia Al-Wazzan then(2000) Marinopoulos

2000 ndash ndash 1

Cyprus Voice la Mode andSymeonides FashionHouse Ltd

by 1988 9 8 8 (c)

CzechRepublic

COMS 1996 ndash 1 3

Dubai (UAE) Al-Futtaim Sons 1998 ndash ndash 1Finland OY Stockmann AB by 1992 ndash 5 6Gibraltar York Ltd by 1988 1 1 1Greece Marinopoulos by 1988 7 9 14 (d)Hungary JV between Demexco

(Vienna) and SModell (Hungary)

1988 2 2 4

Indonesia PT Maikelindo 1992 5 5 8Israel MSIF (Blue Square)

then (19961999)Golf Kitan

by 1991 8 7 7

Kuwait Al-Futtaim Sons 1998 ndash ndash 1Malaysia Robinsons 1996 2 2 3Malta Supermarkets (1960)

Ltdby 1988 3 2 3

Norway Brynild Salg AS 1988 1996 1 ndash ndashPhilippines Rustans (Stores

Specialists Inc)6 7 9

Poland MSF Polska 1999 ndash ndash 1Portugal CRB 1988 1999 4 6 ndash (e)Qatar Al-Futtaim Sons 1998 ndash ndash 1Romania JV between

Marinopoulos andFIBA

2000 ndash ndash 1

Singapore Robinsons 1992 7 7 6South Korea DampS Ltd (Dae

Sung)1997 ndash ndash 5

Spain Corte el 1988 1990 ndash ndash ndash (f)Thailand Central Group

(Suvimol)1993 2 6 10


other or that our understanding of internationalization entry can simply transferover to internationalization exit

MampS understanding internationalization and de-internationalization

The discussion above has described the components of international activity(entry and exit) This section attempts to understand this described process byexamining themes in this internationalization

One of the key themes in retail internationalization is the motivation ofbusinesses and the direction of retail activity The motivation for the purchase ofthe Canadian chains has primarily been ascribed to a set of circumstances andfactors in Britain at the time (see Whitehead 1992) To understand the expansioninto Canada the political and economic situation of the time as well as theinterests of the Marks and Spencer founding families has to be considered Fromprior to 1939 much of the family fortune was invested within the UK but alsoin South Africa in the Woolworths (SA) organization run by the Sussman family(grandchildren of Michael Marks) Indeed from 1947 there has been a formalagreement between the two companies on matters of management know-howand technological transfer as well as an agreement not to trade against eachother in Africa and the Middle East (Gerdis 1999) Because of the growing

Table 5 Continued


1994 1997 2001 Note

Turkey Turk PetrolHoldings then FIBA(1999)

1995 ndash 2 12

Total franchisestores

76 85 118

Total countries 18 20 27 (g)

Note(a) Austria did have four stores in 2000 but trading dif culties saw them close (b)Bahamas are not included in the company list as at June 2001 so could be closed (c) Ineach of these lsquocountriesrsquo there are two partners with separate spatial agreements (d) Thecompany list of June 2001 claims 28 franchise outlets in Greece We believe this isachieved by adding in-store operations (e) The 5 stores of the Portuguese franchise(CRB) were closed in 1999 when MampS severed the relationship MampS subsequentlyreopened two stores as company stores (f) Spanish franchise became a joint venturewith Corte el (g) Other countries have often appeared in the media as possible targetsor even with agreed deals for Marks and Spencer franchises eg Russia Japan Howeverthe truth behind these reports is hard to ascertain and they appear to be incorrect In theAnnual Reports for the late 1980s the company mentions franchises in Denmark andSweden but it is understood that this was not an accurate description of the activityMore accurately a deal for a franchise in Australia was concluded with Just Jeans in 1997but was lsquodelayed inde nitelyrsquo in 1998 Most recently franchises have been announced forIndia (with the Hong Kong owned Planet Sports 082001) and Saudi Arabia (Al Farida092001)Source Annual Reports and Accounts (all years) company web site (2001) reportsobtained via Lexis-Nexis interviews and personal communications


condemnation of the Apartheid regime in South Africa many businesses werewithdrawing their funds At the same time the UK Labour government of the1960s had made noises about extending nationalization into retailing Chainssuch as MampS viewed themselves as possible targets in the future These twoissues resulted in investment in Canada where the Chair and CEO of WalkersAbraham Gold was well known to the MampS families Entry therefore may nothave been for the most positive of reasons

Unfortunately however Canada was not a successful retail venture (Figures 2and 3) Supply chain problems were never properly addressed nor were the

Table 6 Marks and Spencer internationalization exit

Mode ofinternationalactivity Exit methods Example Possible reason for exit

Export business(undated origins)

Allowed to decline NAAFI Declining market

Crisis withdrawal Nigeria Risk evaluationTransformed intofranchises

Philippines Market opportunity

Transformed intocompany stores

Hong Kong Market opportunity

Corporatepurchases (19721988)

Partial sell-off Canada Business restructuring toattempt turn-around

Close down Canada Failure to make returns ofinvestment

Total sell-off USA Failure to make suf cientreturns business t raisemoney

Franchises (1987onwards)

Agreements notrenewed

Israel Franchise performance

Trading declineleading to partialclosure

Singapore Economic view of storeperformance

Trading declineleading to fullclosure

Austria Franchisee withdrew dueto losses

Converted to jointventure

Spain Market opportunity toimprove corporate returns

Converted tocompany stores

Portugal Franchisee performanceunacceptable

Company stores(1975 onwards)

Closure of selectedstores

Germany Economic view of storeperformance

Sold-off France Stores not pro tablebuyer available

Converted tofranchise

Hong Kong To save corporatemanagement effort

Closed down Belgium No buyer for storesdeemed to be unpro table

Joint ventures(1990 onwards)


Spain To maximize returnscentrally

Sources Annual Reports and Accounts foreign newspaper reports obtained throughLexis-Nexis


fundamental differences between the Canadian and the UK clothing require-ments It would also appear that Canadians never lsquogotrsquo MampS Its positioning inthe UK market was replicated for Canada but in a different competitiveenvironment its position was not seen as distinctive nor unique and the brandlacked meaning (Burt and Sparks 2002) Certainly its merchandise did notwarrant its price premium The business model did not transfer (Evans and Cox1997)

Investment was poured into the Canadian operation throughout the 1970s and1980s but without any real impression on the problems Indeed it could beargued that a reckless expansion of a bad business took place When Lord Rayner(the rst non-family member to chair the company since the turn of the century)took over he wished to establish the business as a true international player Thefocus thus switched to the USA and resulted in the purchase of BrooksBrothers In retrospect this was seen as a poor buy for MampS in that the pricepaid was too high and the costs of turning an exclusive chain into a moregenerally available operation outweighed the bene ts Returns were never as highas anticipated (Figures 2 and 3) One of the main parts of the deal space forMampS stores in Campeaursquos malls in the USA was never taken up MampS inessence never were able to run and fully develop these very different chains

Whilst it could be argued that Canada and then the USA represent culturallysimilar situations to the UK in fact the peculiarities of MampS (see later) madethem very different The exit strategy adopted has been to sell off assets inCanada and eventually to close down the remaining operations In the USA theexit is being managed through an offer to sell Sell-off as a strategy is possiblebecause of the lsquodistancersquo between the chains and MampS core business

Second the multi-dimensional approach to store internationalization does notappear to be that coherent In essence the business became a collection ofactivities with little synergy and mix Canada had been problematic for yearsThere was no direction in the United States purchases and no synergy Thefranchise operations were a mix of the small colonial developing markets andrandom other countries There was seemingly no rationale in the choice ofcountries or strategy in where to move next At various times reports of MampSfranchises opening in Russia Australia Taiwan Japan and China amongst othershave appeared in the press The choice of franchisees seems almost haphazardand it is unclear if the details of the franchise deal helped or hindered In somecases it would seem that international expansion initiative has been directedmore by franchisees than by MampS Company-owned stores abroad were develop-ing slowly with interest shifted from Europe to Hong Kong Further a range ofbranding approaches was being used In North America the bulk of theoperation did not trade as MampS unlike in Europe The franchises were mainlybranded as lsquoSt Michaelrsquo At home the operation was struggling with recession(see Figure 1) and a switch in locational and format emphases encompassingmore off-centre and out-of-town stores and stand-alone formats In short thecompany was a collection of operations with little apparent overall strategy otherthan a belief in their own business model and power This belief was in terms ofthe home market apparently well founded until the late 1990s However theconsequences of this lsquopick and mixrsquo approach to the international business wereall too predictable No one element of the international business obtained theattention and direction it needed and potential synergies were not recognized


and achieved The brand potential was never fully leveraged internationallyPurchase or entry alone seemed to be the driving factors rather than a desire todevelop the businesses Store closures franchise withdrawals and market exitswere the all too obvious consequences

Third MampS have always held to a belief in their way of doing things above allelse For example the well known lsquoBuy Britishrsquo policy the lack of advertising andmarketing a refusal to take credit cards and a long time resistance to out-of-towndevelopments all marked the company out as different Mellahi et al (2002)show how this belief created a cycle of misunderstanding of the marketplace inthe UK which reinforced the decline once crisis hit in 1998 (see also Bevan2001) The same holds true for the international operations The peculiarities ofthe operation as for example the long standing aversion to changing rooms andcredit cards in the UK were problems for the international operation toovercome The reliance on the St Michael brand to hold meaning internationallycreated another problem It worked in the UK so why would it not workanywhere else Product sourcing that was heavily based in the UK particularlypost-1996 and to a far greater extent than in competitors damaged the company nancially through the price positions adopted and the currency uctuationscaused by the steady appreciation of Sterling At the same time the internationaloperations were not insulated from market property prices as in the UK whichhid the problems in Britain for some time yet at the same time made overseasbusinesses look comparatively under-performing To a considerable extent whatwere perceived as strengths at home were weaknesses abroad In turn of coursethese have now become institutional weaknesses at home as well

Finally we can consider the current restructuring plan Canada has alreadybeen closed after two decades of problems and weak performance The USchains are up for sale The Hong Kong store business is to be converted into afranchise With the exception of Ireland the company stores in Europe are to beclosed or sold-off as assets (there were also seven previous store closures inGermany and France a year before) This restructuring is to allow concentrationon the problems of the British core chain where modernization and marketpositioning are fundamental to any restructuring Yet it is pertinent to ask justhow much core management time and effort was involved in these internationaloperations as the evidence indicates that it was relatively little Many of theprevious idiosyncrasies of the business are to be eliminated However the waysin which the closure announcements were made remain the subject of Frenchlegal cases one of which MampS recently (September 2001) won although othersremain to be decided Whilst these legal cases have now forced MampS to sell thestores rather than close them (thus protecting jobs to some extent) they couldnot reverse the fundamental decision This is not really the issue however Theclosures in France illustrates one aspect of a number of issues in the process ofmarket withdrawal

The French position is that businesses have moral and social as well as legalobligations to their employees and to the countries in which they operateCompanies who wish to cease operations have to negotiate this with theworkforce provide alternatives and pay appropriate compensation There arethus legal ties on market exit just as there are in some cases on market entry Inmany ways these issues are similar to many of those raised by Davies (1995) inhis analysis of the effect of Trade-Related Investment Measures (TRIMs) on


retail internationalization The MampS affair shows not only that the lsquoplaying eldrsquoin this regard is not level within Europe but also that such considerations affectboth market entry and market exit For international businesses some countriesoffer an easier entry and exit route than others and thus may be favoured forinvestment Compare for example the furore over MampS with the decision in2000 by CampA to close its entire 108 store chain in Great Britain There was nooutcry yet the job loss total was approximately the same The closure announce-ments may have been handled differently internally by the two companies butthe overall effect remains Far from a British or Anglo-American disregard forlsquorightsrsquo the comparative events show that the country of origin of the retailermay be irrelevant What are important are the legal requirements in the countryof operation This raises interesting questions about harmonization of labour andcommercial laws and their applicability to international retail operations includ-ing affecting decisions on entry and exit

Conclusions

Our experience illustrates that to succeed internationally when enteringmature markets you must adapt your store formats to the competitive realitiesof these markets

(MampS Annual Report 2001 1ndash2)

Why did the internationalization activity of MampS fail With hindsight it mightbe said that there are a number of inter-connecting reasons First there has beenno overall internationalization strategy Some of the activities have been seren-dipitous some were probably misguided But the range of activities and theincoherence amongst them tends to point to a lack of direction over a longperiod This is a management failure There were global ambitions for thebusiness as evidenced in the lsquoQuality Value Service worldwidersquo promotionalline of the mid 1990s but no real commitment to converting these ambitionsinto something concrete Second many of the elements that made MampSsuccessful in the UK did not apply in the global arena The long-sustained buy-British policy the peculiarities of the retail operation the emphasis on a Britishbrand alone and the lack of clear retail positioning and design all presentedproblems in the global situation This suggests that in addition to entry thereshould be concern with activities after establishment Third despite the lengthof time in international activities there was no experience of decentralizedcontrol of businesses and the systems needed to develop these businesses Valuesin the companies taken over were not enhanced Arguably MampS never reallyunderstood what they had bought as it was so different to their own operationWhen the crisis hit at home the reaction was quickly to distance themselvesfrom this global operation If it had really worked then this internationaldimension could have been a source of strength in times of crisis In short thefailure of the international operation falls at the feet of successive MampSmanagement teams

This study lends more credence to the OS perspective discussed earlier thanto the IO perspective The international failure of MampS was not a product ofexternal constraints alone MampS management often had a genuine choice to


enter and exit international markets Management had the ability to choosewhere when and how to enter international markets and when where and howto exit from them The argument that rms withdraw for rational economicobjectives alone provides only a crude indication to why rms fail internationallyIt is suggested that the issue of who makes such choices needs to be examinedin more detail when studying international failure

So what else does this case say about the literature on failure and inter-nationalization Four key issues can be suggested here First it would seem thatthere may be differences between crisis and failure at home and abroad Marksand Spencer had crises abroad over a long period of time but whilst theyaffected in some way the parent operation they could not be said to be businessthreatening This suggests that in companies that are multi-national in theiractivities crises differ in their degree and their importance Whilst self-evidentto some extent it does argue that failure needs to be looked at in businesses atvarious scales including both organizational and spatial scales Internationalfailure may be caused by failure at home rather than operational failure in theoverseas market It might be argued that if MampS had not suffered such a crisisat home then their poor international performance would have been less visibleor problematic However in this more global retail market place and withcontinuous analysis of companies it is more likely that their continued problemsabroad would have impacted on the market view of the potential for the businessin due course

This paper would also argue that the case demonstrates clearly that models ofinternationalization focusing on growth patterns and development alone areinadequate Whilst there are some links to concepts of expertize in internationalactivity this failure case shows that it is necessary to understand how and whyfailures in internationalization occur in order to fully conceptualize the changingretail internationalization world Studying only the market entry of Marks andSpencer is simply inadequate Internationalization studies need to considermarket entry failure or withdrawal in terms of issues of corporate managementmarket issues themselves and business method issues Also it might be useful toadd to these issues which have not been covered in detail here such as theclosure of other non-shop based activities such as buying of ces and themovement of stores at locational levels within countries eg the urban hierarchyand micro-locations At the moment retail internationalization theory wouldseem to be covering only one part of the internationalization story

Third the case also raises the issue of what is meant by failure in inter-nationalization MampS have changed and altered their international activitiesswapping modes of operation and indeed withdrawing from some activitieslocations and countries Franchise partners have failed but the internationalactivity has continued There are elements of closure failure exit and divest-ment as well as complicated activity switching Our lexicon to describeunderstand and conceptualize this is insuf ciently developed

Finally there is a speci c issue raised by the MampS case in this regard Marksand Spencer have announced a radical restructuring plan as detailed earlier Thisplan abandons much of the international activity to concentrate on the UK Partof this plan provides for a major dividend reimbursement to shareholders oncompletion of property and closure activities Leaving aside questions of whichstores in continental Europe may or may not make pro ts (as the data are not


really available) it does seem that much of this plan is driven by the need tosatisfy institutional shareholders and the London Stock Exchange who saw theirinvestments in the company decline massively in value Financial imperativesmay be dictating the scope of the restructuring of the international activity (theyseem to have succeeded to date in this regard as the share price has risen sharplysince the depth of the crisis though it remains at a level half its peak some yearsago)

The case study of MampSrsquos internationalization experiences has demonstratedthat any account of retailing development has to include issues of inter-nationalization and failure Their story is one that is relatively common yetunder-reported and under-researched in the literature Perhaps this case studycan be the start of a fuller study of these issues and begin the process ofconceptualizing all international retail activities

Acknowledgements

The authors thank the referees for their useful and helpful comments as well as otherswho read some or all of the manuscript and gave advice generally or on points of detailHelpful information about commercial aspects of the franchise relationships was alsoreceived from a number of individuals who must remain anonymous

References

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Aldrich HE (1979) Organizations andEnvironments Englewood Cliffs NJPrentice Hall

Aldrich HE and Pfeffer J (1976)lsquoEnvironments of organizationsrsquoAnnual Review of Sociology 2 79ndash105

Alexander N (1990) lsquoRetailers andinternational markets motives forexpansionrsquo International MarketingReview 7(4) 75ndash85

Alexander N (1997) InternationalRetailing Oxford Blackwell

Alexander N and Doherty AM (eds)(2000) lsquoThe internationalization ofretailingrsquo International MarketingReview special issue17(45) 307ndash475

Alexander N and Myers H (2000)lsquoThe retail internationalizationprocessrsquo International MarketingReview 17(45) 334ndash53

Alexander N and Quinn B (2001)Divestment and the internationalizationprocess Paper presented at the 11thInternational Conference on Research in

the Distributive Trades Tilburg TheNetherlands June

Anheier HK (ed) (1999) When ThingsGo Wrong Organizational Failures andBreakdowns Thousand Oaks Londonand New Delhi Sage

Amburgey TL and Rao H (1996)lsquoOrganizational ecology past presentand future directionsrsquo Academy ofManagement Journal 39(5) 1265ndash86

Argenti J (1976) Corporate CollapseThe Causes and Symptoms LondonMcGraw-Hill

Balderston FE (1972) lsquoVarieties of nancial crisesrsquo Ford Foundationprogramme for research in UniversityAdministration University ofCalifornia Berkeley

Bateman T B and Zeithami C P(1989) lsquoThe psychological context ofstrategic decisionsrsquo StrategicManagement Journal 10 587ndash92

Baum JA and Singh J (1994)lsquoOrganizational niches and thedynamics of organizational mortalityrsquoAdministrative Science Quarterly 36187ndash218


Baronelli A and Manaresi A (1997)lsquoFranchising as a form of divestmentan Italian studyrsquo Industrial MarketingManagement 26 223ndash35

Benito GRG (1997) lsquoDivestment offoreign production operationsrsquo AppliedEconomics 29 1365ndash77

Bevan J (2001) The Rise and Fall ofMarks and Spencer London Pro leBooks

Bird JH and Witherick ME (1986)lsquoMarks and Spencer ndash the geographyof an imagersquo Geography 71(4) 305ndash19

Bookbinder P (1989) Marks andSpencer The War Years 1939ndash1945London Century Bentham

Bookbinder P (1993) Simon MarksRetail Revolutionary LondonWeidenfeld and Nicholson

Boulding KE (1950) A Reconstructionof Economics New York Wiley

Briggs A (1984) Marks and Spencer1884ndash1984 London Octopus Books

Brown S and Burt SL (1992) lsquoRetailinternationalizationrsquo European Journalof Marketing special issue 26(89)

Burd HA (1941) lsquoMortality of menrsquosapparel stores in Seattle 1929ndash39rsquoJournal of Marketing 6 22ndash6

Burt S (1991) lsquoTrends in theinternationalization of groceryretailingrsquo International Review ofRetail Distribution and ConsumerResearch 1(4) 487ndash515

Burt S (1993) lsquoTemporal trends in theinternationalization of British retailingrsquoInternational Review of RetailDistribution and Consumer Research3(4) 391ndash410

Burt SL and Carralero-Encinas J(2000) lsquoThe role of store image inretail internationalizationrsquo InternationalMarketing Review 17(45) 433ndash53

Burt SL and Sparks L (2002)lsquoCorporate brandinginternationalization and the retailer asa brandrsquo Corporate Reputation Review(forthcoming)

Cameron K S Sutton R L andWhetton D A (eds) (1998) Readingsin Organizational Decline FrameworksResearch and Prescriptions CambridgeMA

Campbell DT (1969) lsquoVariation andselective retention in socioculturalevolutionrsquo General Systems 16 69ndash85

Carree M and Thurik R (1996)lsquoEntry and exit in retailing incentivesbarriers displacement andreplacementrsquo Review of IndustrialOrganization 17 985ndash1007

Chang SJ and Singh H (1999) lsquoTheimpact of modes of entry and resource t on modes of exit by multibusiness rmsrsquo Strategic Management Journal20 1019ndash35

Chesterman D (1984) lsquoA look behindthe scenes at Marks and SpencerrsquoLocal Government Studies 10(4) 1ndash5

Clark G and Wrigley N (1997) lsquoExitthe rm and sunk costsreconceptualizing the corporategeography of divestment and plantclosurersquo Progress in Human Geography21 338ndash58

Converse PD (1932) lsquoSome aspects ofgrocery store failuresrsquo University ofNebraska Studies in Business 4

DrsquoAveni R A (1989b) lsquoDependabilityand Organizational Bankruptcy AnApplication of Agency and ProspectTheoryrsquo Management Science351120ndash38

DrsquoAveni R A (1990) lsquoTop ManagerialPrestige and OrganizationalBankruptyrsquo Organizational Science 1121ndash42

Davidson WR Bates AD and BassSJ (1976) lsquoThe retail life cyclersquoHarvard Business Review 55(6) 89ndash96

Davies BK (1995) lsquoThe regulation ofretail internationalization examplesfrom the Paci c Asia regionrsquo inMcGoldrick PJ and Davies G (eds)International Retailing Trends andStrategies London Pitman Ch 12219ndash38

Davies G (1999) lsquoThe evolution ofMarks and Spencerrsquo Service IndustriesJournal 19(3) 60ndash73

Dawson JA (1993) lsquoTheinternationalization of retailingrsquo inBromley RDF and Thomas CJ(eds) Retail Change ContemporaryIssues London UCL Press 15ndash40

Dawson JA (1994) lsquoInternationalizationof retail operationsrsquo Journal ofMarketing Management 10 267ndash82

Dawson JA (2001) lsquoStrategy andOpportunism in European RetailInternationalization BAM 2000rsquo


British Journal of Management 12253ndash66

Downs A (1967) Inside BureaucracyBoston Little Brown

Dresdner Kleinwort Wasserstein(2001) Marks and Spencers The EasyBit London Dresdner KleinwortWasserstein

Drucker PF (1974) Management TasksResponsibilities Practices OxfordHeinemann

Evans W and Cox S (1997) lsquoRetailBorder Wars III case studies ofinternational retailers operating inCanadarsquo Centre for the Study ofCommerical Activities RyersonPolytechnic University ResearchReport 10

Finlan SMF (1992) lsquoA strategy for aninternational retail franchiseorganization case study of Marks andSpencer PLC unpublished MBAThesis University of Stirling

Frank M Z (1998) lsquoAn IntermporalModel of Industrial Exitrsquo QuarlerlyJournal of Economics 103333-44

Gerdis B (1999) Woolworth HoldingsLtd Ing Barings London

Godley A and Fletcher S (2000a)lsquoForeign entry into British retailing1850ndash1994rsquo International MarketingReview 17(45) 392ndash400

Godley A and Fletcher S (2000b)lsquoInternational retailing in Britain1850ndash1994rsquo Service Industries Journal 21(2)31ndash46

Goldenberg N (1989) Thought forFood A Study of the Development ofthe Food Division of Marks andSpencer An Autobiography OrpingtonFood Trade Press

Goodman MRV (2000) lsquoThefrustration of talent a study in scarletrsquoCreativity and Innovation Management9(1) 46ndash53

Hannan MT and Freeman JH(1978) The Population Ecology ofOrganizations Theoretical and EmpiricalPerspectives San Francisco Jossey-Bass

Hannan M T and Freeman J (1984)lsquoStructural Inertia and OrganizationalChangersquo American Sociological Review49 75ndash94

Hinfelaar M and Kasper H (2001)Virgin Megastores swallowed up by the

Free Record Shop in the Benelux ananalysis of a failed internationalretailing strategy Paper presented at the11th International Conference onResearch in the Distributive TradesTilburg The Netherlands June

Hollander SC (1960) lsquoThe wheel ofretailingrsquo Journal of Marketing 2437ndash42

Howells DJ (1981) lsquoMarks and Spencerand the Civil Service ndash a comparisonof culture and methodsrsquo PublicAdministration 59 337ndash52

Jackson TP (1998) lsquoTaking coals toNewcastle the movement of clothingto Hong Kong and the Far Eastrsquo inFernie J and Sparks L (eds) Logisticsand Retail Management LondonKogan Page Ch 4 pp 66ndash87

Jovanovic B and Lach S (1989)lsquoEntry exit and diffusion with learningby doingrsquo American Economic Review79 690ndash99

Kirby DA and Law DC (1981) lsquoThebirth and death of small retail units inBritainrsquo Retail and DistributionManagement 9(1) 16ndash19

Kumar N (1997) lsquoThe revolution inretailing from market driven to marketdrivingrsquo Long Range Planning 30(6)830ndash35

Laulajainen R (1991) lsquoTwo retailers goglobal the geographical dimensionrsquoInternational Review of RetailDistribution and Consumer Research1(5) 607ndash26

Laulajainen R (1992) lsquoLouis VuittonMalletier a truly global retailerrsquoArticles of the Japanese Association ofEconomic Geographers 38(2) 55ndash70

Lawler EE III and Galbraith JR(1994) lsquoAvoiding the corporatedinosaur syndromersquo OrganizationalDynamics 23(2) 5ndash19

Levine CH (1978) lsquoOrganizationaldecline and cutback managementrsquoPublic Administration Review 38316ndash25

Lippman S A and Rumelt RP(1982) lsquoUncertain Imitability AnAnalysis of Inter rm Differences inEf ciency under Competitionrsquo TheBell Journal Economics 13 418ndash38

Lord JD Moran W Parker AJ andSparks L (1988) lsquoRetailing on threecontinents the discount food store


operations of Albert GubayrsquoInternational Journal of Retailing 3(3)1ndash54

MacLaurin I (1999) lsquoTiger by the TailBasingstoke Macmillan

McGoldrick PJ (1998) lsquoSpatial andtemporal shifts in the development ofretail imagesrsquo Journal of BusinessResearch 42(2) 189ndash96

McGoldrick PJ and Blair D (1995)lsquoInternational market appraisal andpositioning in McGoldrick P andDavies G (eds) International RetailingTrends and Strategies London PitmanCh 9 pp 168ndash90

McGoldrick PJ and Ho SL (1992)lsquoInternational positioning Japanesedepartment stores in Hong KongrsquoEuropean Journal of Marketing26(89) 61ndash73

McGoldrick P and Davies G (eds)(1995) International Retailing Trendsand Strategies London Pitman

McGurr PT and DeVaney SA (1998)lsquoA retail failure prediction modelrsquoInternational Review of RetailDistribution and Consumer Research 8259ndash76

Mellahi K Jackson TP and SparksL (2002) lsquoAn exploratory study intofailure in successful organizations thecase of Marks and Spencer The BritishJournal of Management forthcoming

Meyer AD (1982) lsquoAdapting toenvironmental joltsrsquo AdministrativeScience Quarterly 27(4) 515ndash38

Meyer-Ohle H (2002) lsquoThe crisis ofJapanese retailing at the turn of themillennium International Review ofRetail Distribution and ConsumerResearch 12 13ndash28

Miller D (1990) The Icarus ParadoxNew York Harper

Myers H (1995) lsquoThe changing processof internationalization in the EuropeanUnionrsquo Service Industries Journal15(4) 42ndash56

Nijkamp J Carree M and ThurikR (2001) lsquoThe determinants of entryand exit in retailing the role ofincentives and barriersrsquo paperpresented at the 11th InternationalConference on Research in theDistributive Trades Tilburg TheNetherlands June

Pauchant T and Douville R (1993)lsquoRecent research in crisis managementA study of 24 authorsrsquo publicationsfrom 1986 to 1991rsquo Industrial andEnvironmental Crisis Quarterly 7(1)43ndash66

Pellegrini L (1994) lsquoAlternatives forgrowth and internationalization inretailingrsquo The International Review ofRetail Distribution and ConsumerResearch 4 121ndash48

Quinn B (1996) lsquoInternational retailingtheory and practicersquo unpublished PhDThesis University of Ulster

Quinn B and Doherty AM (2000)lsquoPower and control in internationalretail franchisingrsquo InternationalMarketing Review 17(45) 354ndash72

Rees G (1969) St Michael A History ofMarks and Spencer LondonWeidenfeld and Nicholson

Retail Week (2001) Marks and SpencerSpecial Retail Week 13 July p 14ndash20

Ricks D A (1983) Big BusinessBlunders Mistakes in MultinationalMarketing Dow Jones-IrwinHomewood IL

Ricks D A (1999) Blunders inInternational Business BlackwellBusiness Malden MA

Ross J I and Kami M J (1973)Corporate Management in CrisisPrentice-Hall Englewood Cliffs NJ

Sheppard P J (1994) lsquoStrategy andBankrupcy An exploration intoorganizational deathrsquo Journal ofManagement 20 795ndash833

Sheppard J (1995) lsquoA resourcedependence approach to organizationalfailurersquo Social Science Research 2428ndash62

Sieff IM (1970) Memoirs LondonWeidenfeld and Nicholson

Sieff M (1986) Donrsquot Ask the Price TheMemoirs of the President of Marks andSpencer London Weidenfeld andNicholson

Sieff M (1990) Marcus Sieff onManagement the Marks and SpencerWay London Weidenfeld andNicholson

Sobel R (1999) When Giants StumbleHarlow Pearson

Sparks L (1995) lsquoReciprocal retailinternationalization the SouthlandCorporation Ito-Yokado and 7-Eleven


convenience storesrsquo Service IndustriesJournal 15(4) 57ndash96

Sparks L (1996a) lsquoChallenge andchange shoprite and the restructuringof grocery retailing in ScotlandrsquoEnvironment and Planning A 28261ndash84

Sparks L (1996b) lsquoSpace wars WmLow and the Auld enemyrsquo Environmentand Planning A 28 1465ndash84

Sparks L (2000) lsquoSeven-eleven Japanand the Southland Corporation amarriage of conveniencersquo InternationalMarketing Review 17(45) 401ndash15

Staw B M (1981) lsquoThe Escalation ofCommitment to a Course of ActionrsquoAcademy of Management Review 6577ndash87

Staw B M Sanderalnds L andDutton J E (1981) lsquoThreat-rigiditycycles in organizational behavior Amulti-level analysisrsquo AdministrativeScience Quarterly 26 501ndash24

Sternquist B (1997) lsquoInternationalexpansion of US retailersrsquo InernationalJournal of Retail and DistributionManagement 25(8) 262ndash8

Sternquist B (1998) InternationalRetailing New York Fairchild

Sternquist B and Kacker M (1994)European Retailingrsquos Vanishing BordersWestport Quorum

Treadgold A (1991) lsquoDixons and LauraAshley different routes tointernational growthrsquo InternationalJournal of Retail and DistributionManagement 19(4) 13ndash19

Tse KK (1985) Marks and Spencer ndashAnatomy of Britainrsquos most Ef cientlyManaged Company Oxford Pergamon

Tse KK (1989) lsquoMarks and Spencer amanufacturer without factoriesrsquo inAnderson A (1994) InternationalTrends in Retailing Fall reprinted pp111ndash26 Tenth Anniversary EditionRetailers on Retailing Chicago ArthurAnderson

Turnbull P and Wass V (1998)lsquoMarksist management sophisticatedhuman relations in a high street retailstorersquo Industrial Relations Journal

29(2) 98ndash111 (see also Renwick D(1998) lsquoNeither Rhetoric nor Reality acomment on Turnbull and WassrsquoIndustrial Relations Journal 29(3)247ndash51

Whetton D A (1988) lsquoOrganizationalgrowth and decline processesrsquo InCameron K S Sutton R I AndWhetton D A (eds) OrganizationalDecline Frameworks Research andPrescriptions Ballinger CambridgeMA 3ndash19

Whitehead M (1991) lsquoInternationalfranchizing ndash Marks and Spencer acase studyrsquo International Journal ofRetail and Distribution Management19(2) 10ndash2

Whitehead M (1992) lsquoMarks andSpencer Britainrsquos leading retailerquality and value worldwidersquoManagement Decision 32(3) 38ndash41

Williams D (1992) lsquoMotives for retailerinternationalization their impactstructure and implicationsrsquo Journal ofMarketing Management 8 269ndash85

Witteloostuijn V A (1998) lsquoBridgingBehavioural and Economic Theories ofDecline Organizational InertiaStrategic Competition and ChronicFailurersquo Management Science 44501ndash19

Wrigley N (2000a) lsquoThe globalization ofretail capital themes for economicgeographyrsquo in of Clark GLFeldman MP and Gertler MS (eds)The Oxford Handbook of EconomicGeography Oxford Oxford UniversityPress Ch 15 292ndash313

Wrigley N (2000b) lsquoStrategic marketbehaviour in the internationalization offood retailing interpreting the thirdwave of Sainsburyrsquos USdiversi cationrsquo European Journal ofMarketing 34 891ndash918

Zajak E J and Bazerman M H(1991) lsquoBlind Spots in Industry andCompetitor Analysis Implications ofInter- rm (Mis) Perceptions forStrategic Decisionsrsquo Academy ofManagement Review 16 37ndash56


continental European stores viewing them as lsquodistractionsrsquo in its quest to restoreits fortunes (which have seen sales stagnate since 1998 pro ts (after exceptionalitems) fall by over pound1bn in three years and its share price collapse from a highof pound660 on 3 October 1997 to a low of pound170 on 20 October 2000) A wave ofprotests across continental Europe about the closures and job losses was theresult This lsquomanagerial giant of the western worldrsquo (Drucker 1974) and lsquoone ofthe best managed companies in the worldrsquo (Tse 1985) found its closureannouncement condemned by the French Prime Minister Lionel Jospin aslsquoparticularly unacceptable (they) should be punishedrsquo Other French minis-ters weighed in with comments on the lsquoscandalrsquo and lsquoexceptionally brutalbehaviourrsquo of the company In early April 2001 a French court ned MampS forbreaking the law through a lack of consultation with its workers (they claimedthey were effectively sacked by e-mail) and its lsquomanifestly illegal trouble-makingrsquo suspended the store closures and threatened prosecutions of individualMampS managers Demonstrations and protests continued in the summer of 2001including a rally and march in London organized by the global skills andservices union UNI Rather ironically one analyst report (Dresdner KleinwortWasserstein 2001) described the announced restructuring as the lsquoeasy bitrsquo ofturning MampS around

Whilst much attention has rightly focused on the rights of employers to act asthey see t and employees to be consulted and informed properly the announce-ment by Marks and Spencer was signi cant for another reason It signalled anend to the international ambitions of successive MampS chairmen and Boards ofDirectors Whilst some international store activity will remain mainly in theform of franchised shops most company-owned activities will be sold off closeddown or franchised So ends over 30 years of direct retail international activityand ambition MampSrsquos internationalization could perhaps be viewed as aninglorious failure Given the current level and scale of international retaileractivity (eg Ahold Delhaize) and takeovers at the international level by leadingretailers (eg Wal-MartAsda and CarrefourPromodes) Marks and Spencercan no longer be considered a candidate for the lsquoglobal retail elitersquo Rather it is ghting for its independent life in its British heartland Whiteheadrsquos (1992 41)challenge (lsquoto become the major international retailer with products whichsell worldwidersquo) has not been met

The phenomenon of previously successful companies facing a survival crisis isnot new (Miller 1990 Lawler and Galbraith 1994 Anheier 1999) The corporatelandscape is littered with the bones of bankrupt but previously successfulcorporations Several popular books describe collapses of successful companies(eg Ross and Kami 1973 Ricks 1983 1999 Miller 1990 Sobel 1999)Notwithstanding the commercial importance of organizational failures both atthe corporate and business start-up levels the topic however is not a centraltheme of management research (Cameron et al 1988 Whetten 1988 Sheppard1994) Pauchant and Douville (1993) argue that whilst excellence is well-established within the literature on strategy (and indeed MampS have beenincluded themselves in a number of lsquoexcellencersquo collections) the study of failureor market withdrawal is generally less common (though for a recent retailexample see Meyer-Ohle 2002)

If organizational failure is not a central theme in management research thenthe idea of failure in retail internationalization research hardly registers at all








































































TOTAL 10



































1994 1997 2001 Note

Abu-Dhabi(UAE)



1994 2000 2 3 ndash (a)



by 1988 3 3 5 (c)

ChannelIslands


by 1988 7 4 4 (c)


2000 ndash ndash 1


by 1988 9 8 8 (c)

CzechRepublic

COMS 1996 ndash 1 3



1988 2 2 4



by 1991 8 7 7


Ltdby 1988 3 2 3





2000 ndash ndash 1




(Suvimol)1993 2 6 10






Table 5 Continued


1994 1997 2001 Note


1995 ndash 2 12


76 85 118




















































Conclusions














Acknowledgements


References







































































































































































































TOTAL 10



































1994 1997 2001 Note

Abu-Dhabi(UAE)



1994 2000 2 3 ndash (a)



by 1988 3 3 5 (c)

ChannelIslands


by 1988 7 4 4 (c)


2000 ndash ndash 1


by 1988 9 8 8 (c)

CzechRepublic

COMS 1996 ndash 1 3



1988 2 2 4



by 1991 8 7 7


Ltdby 1988 3 2 3





2000 ndash ndash 1




(Suvimol)1993 2 6 10






Table 5 Continued


1994 1997 2001 Note


1995 ndash 2 12


76 85 118




















































Conclusions














Acknowledgements


References
































































































































































1994 1997 2001 Note

Abu-Dhabi(UAE)



1994 2000 2 3 ndash (a)



by 1988 3 3 5 (c)

ChannelIslands


by 1988 7 4 4 (c)


2000 ndash ndash 1


by 1988 9 8 8 (c)

CzechRepublic

COMS 1996 ndash 1 3



1988 2 2 4



by 1991 8 7 7


Ltdby 1988 3 2 3





2000 ndash ndash 1




(Suvimol)1993 2 6 10






Table 5 Continued


1994 1997 2001 Note


1995 ndash 2 12


76 85 118




















































Conclusions














Acknowledgements


References





































































































































Table 5 Continued


1994 1997 2001 Note


1995 ndash 2 12


76 85 118




















































Conclusions














Acknowledgements


References

















































































































































































Conclusions














Acknowledgements


References









































































































































Acknowledgements


References

































































































































retail internationalization and retail failure: issues from the case …€¦ · ·...

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