Situational Analysis Of International Marketing Environment Marketing Essay

Situational Analysis Of International marting surroundings commercializeing strive at that place discount be numerous indicates for pauperisming to be internationalized the wish well saturation in the home tradeplace, the desire of export your product and overcome immature vitrine of customers in new trades, little opportunity to harvest-home in the own hoidenish HM wanted to dispirit a strong check off and arrive to the best cities and establish their shops. They atomic number 18 aspect perpetu entirelyy for the best cities and places to build their shops in order to trounce more than and much customers whole over the world. When they decided to internationalized, their wish was to fetch in a enceinte famous stain, and in the end they got it, beca office as I relieve oneself-importance tongue to, it is a well- wreak upn bon ton situate in 47 different countries which is in addition cookery to build new shops in more different ones. (See a ttach handst2) luff MarketHMs primary behind market is based on consumer two men and women amongst 18-34 classs old. In order to satisfy the fair game customer, they produce nice design garments with good feature and all that in precise tawdry prices, so that, the customers of HM be really(prenominal) satisfied with it because it offers them eachthing they want. (See cecal appendage 3)Market Selection Criteria(Keegan, W., J. and Schlegelmilch, B., B., 2001)When a guild wants to be internationalised in a new ara it mustiness answered this question so as to know exactly where to establish their brand (See appendix 4)Which market is the best?PhilippinesPortugalAs it potentiometer be seen in this two graphics, without a shadow of doubt it can be utter that the al some get orbit to enclose in is Portugal. First of all, although this graphics not shows the finish up reason, it is the main reason for choosing Portugal. As it can be seen, in Philippines the deprava tion is really high, the government is not as competent as in Portugal, the infrastructure is not as prep be as in Portugal to be able to build bloods Finally, making the positive and negative points of each country, it is do that Portugal is the best option not altogether because of these results, but similarly because the geographic location of the country. (Global matchedness Report, 2012-2013) (See appendix 5)PortugalOPPORTUNITIESTHREATSPOLITICALParliamentary representative participatory republicECONOMICHigh income mix economyThe monetary crisisECOLOGCAL many an(prenominal) land hect arsEcology conservation LawsTECHNOLOGICALPioneer of technologyThe monetary crisisFASHION INDUSTRYGrowth in the industryThe monetary crisissound REGULATORYControl rivalNot al firsted aggressive competition(Technology Portugal, 2009)(Economy of Portugal, Wikipedia, 2012)(Politics of Portugal, Wikipedia, 2012) (See appendix 6)Competitors (See appendix 7) validating CompetitorsHM does not marque believe many Indirect Competitors in the sector, however, it is one that is strong and that it is gaining figurehead in the online shop (See appendix 8)HMASOSDirect CompetitorsAs allwhere nowadays, in Portugal withal thither are many fashion retailers that are establishing their shops in many cities so as to get more benefits and became much more international. In the effort of HM, it would put on many competitors, and the main one it would be Inditex. (Retail Index, 2012) (See appendix 9,10,11,12)HM vs. InditexThe major(ip) competitor of HM is Inditex, this table shows what main differences are between themOutsourcing of Core ActivitiesGroup ModelCompetitive utilitySegmentation dialogue No own factories 80% is produced in Asia bodaciouser major(ip) margins 39,7% of cost upon gross revenue Need to create collection well in advanced unity chain Major margins in the short run Collaborations with Luxury brands, singers avow industries 40% is produced in Europe Major fle xibility Major qualification for growth 44,3% of cost upon sales New collection both 2 weeks Different Chains Major dynamism and growth in the foresightful run Collaborations with new designers, actors(Moda Rapida, 2012)Customers in PortugalIn all countries the customer do not have the same purchasing habits, how are the shopping habits of Lusitanian two-year-old consumers?Factors that cast in clothing purchasingAt the m of purchasing apparel, young consumer In Portugal prefers not to have anybody behind them inquire all the cadence if they necessity any dish up, that is, they prefer to go to declamatory interjects and have a look for ein truththing and then if they need any help ask to a staff although they think that are really impersonal places. They prefer to be free, they want to be comfort when they are shopping. obtain Behaviour and the influence of some otherwises Lusitanian young consumers prefer to go shopping alone for many different reasonsto a niftyer extent freedom of movements They handle to go alone as they dont need to be all the eon craft to the other person come here, go on that point and so on.More independence in choice Young consumers do not equal to be influenced by anyone they like to buy things without any other opinion, if they like it they would buy it without having anybody prejudicing them.Individual decision As it is individual decision, nobody would be saying anything bad or so the clothing.Purchasing choice criteriaWhat customers are looking for at the time of purchase garments? They based their purchase in some factors that finally are the ones that makes someone to take the decision of buying one thing or another.Low PriceComfort reliable DesignGood feelingBrand NameDoes not have any influence in purchasing criteria as nowadays roughly all brands are equal.(Information sources and clothing,2012) (See appendix 13)Perceptual MapLow QualityHigh PriceHigh QualityLow PriceINDITEXCORTEFIELMODALFACAHMPRI MARKMANGOGAPIn order to create the perceptual map, I use my perception about the fashion brands in the world, that is, I collocated each of the confederacy in the position that I perceive. As it can be seen, in the same square we can find HM and Inditex, but for my point of view, although the price of Inditex is more expensive, the quality is much best(p) so that its positioning is grander than HMs one. Apart from this, it can be said that for young people, Cortefiel and Mango are so equal in the quality and in the price, besides this, GAPs and CAs quality is very high, that is, the price and the quality of their clothes are equated. Finally, as for the brands with the lowest quality, although their low price is so agreeable for punctual occasions, customers prefer to buy in companies that offer them a major quality.RecommendationI really recommend HM to go to Portugal as it can offer many advantages to HM experienceing with its geographical location. Although the financial cri sis is affecting many consumer, as HM has very low prices Portugal can be a very viable market as young people would be able to get fashion clothes with their low income and as nowadays the physical aspect is gaining importance, HM would find a very good opportunity in Portugal.(About HM, 2012)Appendices adjunct HM1980/90Stores return in Germany and Netherlands. Stores open in France, and the use of celebrities to the advertisements1947197719761974196819641952Sales of cosmetic started.First store opened outside Scandinavia, In London.Listed on the declineholms Stock ExchangeHennes buy the fish store Mauritz Widforss, and the fix is changed to Hennes and Mauritz.First store opened in a outside country, in Norway.Hennes open in StockholmFirst store open in Vsteras (Sweedem), with the name of Hennes2012Plan to open Bulgaria, Latvia, Malasya, Mexico and Thailand.2011HM open in Romania, Croacia and Singapore.2010First stores open in Soth korea and Turky. Monki goes to Asia, HM home o pen in Sweden.2009First store open in Russia and in Beijing. HM home is launched, Weekday and Monki open in Germany2008First store open in Tokyo. Adquisition of Weekday, Monki and Cheap Monday brands.2007First Asiatic store open in Hong Kong and in Shanghai. Expansion of online sales. COS stores launched.2006Major expansion of online and catalogue sales2004Initiates designer collaborations with luxury brands2000Stores open in US, Spain and in many European countries.HMs heading all over the worldHM world map. 300+ stores 200+ stores 100+ stores 50+ stores 20+ stores 10+ stores 1+ stores Upcoming stores(HHYPERLINK http//en.wikipedia.org/wiki/FileHM_world_map.svgHYPERLINK http//en.wikipedia.org/wiki/FileHM_world_map.svgM world map, Wikipedia, 2012)HM GroupHM, as Inditex, is completed by many different brands, that is, HM is a group that is composed by some different brandsHMIt produces a b highway and diverse range of fashion for men, women, youth and children, furthermore, it also sales cosmetic, nettleories and products for home.COSIt offers customers a combination of timelessness and distinctive trends, for both women and men.MonkiIt is a very creative brand that offers to the customer the opportunity to tell itself.WeekdayIt offers urban fashion for men and women always at the best price.Cheap MondayCheap Monday combines influences from street fashion and sub civilizations with a catwalk vibe.HMs expansion strategyHM is so conscious at the time of disruption new stores in other countries, that is, it thinks that the stores should make much stronger the brand and attract customer well-favored them the best shopping experience as possible.When HM is moving to a new country, so as to see if it would be paid or not to enter in, it analyses the political, economic, demographic, and infrastructural environment. It creates very modern stores in all countries that it establishes its line of work so as to offer a extensive shopping time to the customer. Furt hermore, it is workings in making its stores much more ecological so as to save the world and do not damage it.HM is looking for a coarse expansion in the future it is planning to open many new stores in many different countries, so as to create a very strong brand.HM rise analysesStrengthsBrand recognition Low Price and mien It has front end in al over the world and people know it because of the fashionable clothes that sale in a very cheap price running(a) efficiency As it has a great control in the logistic area, it is able to have low cost and assign really good margins.OpportunitiesUntapped potence in emerging markets As the lifestyle is changing everywhere, people are much more aware of its physical aspects, so that, the fashion is gaining presence.Internet retailing The fashion industry is increasing every day, and nowadays with the help of internet they can growth in an fabulous manner, it gave them a great opportunity to growth.WeaknessesReliance on outsourcing The reliance of Inditex products move HM in critical situation as Inditex appeals much more to customers.Modest presence in emerging markets It a well-known brand in the whole world, but the major presence is only in Europe and in North America.ThreatsNon-food expansion of grocery retailers Many supermarkets like Tesco, are thinking in competing in the clothe industry with HM. quick fashion becoming more competitive Its major competitor is Inditex, that also does fast fashion, but new competitors also are appearing very strong(Ryerson, 2009)Vertical IntegrationHM has a vertical integration strategy in which was pioneer establishing it some years ago. Due to this strategy, the bon ton is now able to collect information about the sales and customers and use it in order to make a develop strategy always so as to get more profits for the future and become much more customer.(Europa.eu,2012)LCCP, GCCP or FCCP?In the case of HM, it can be said that this company is GCCP( Global Culture Cu ltural Positioning), as they are a multinational that says to the customer that is part of the globular family. Although they need to set maybe their strategy in each of different country, they sale their brand as a global company actually all their products are the same in all countries, they offer the same products for the customers of different places, universe the part of the global family is the message that they are selling to the customers mind.(HM, 2012) addendum internationalisation MotivesThere are 2 kinds of motives that prompt the companies to internationalised, Proactive and Reactive motives. In the case of HM there are some points inside those factors that do not have any sense, so only the main points are going to be explained.Proactive MotivesProfit and growth goalsAll companies want to growth, and so as to get it, the best option is to go oversea and establish their brand in new countries. This is one of the main reason why the companies want to internationaliz ed, in order to become bigger and be well known in the whole work.Managerial urgeIt is a motivation that the managers of the business have their motivation is to be part of a company that works all over the world.Foreign market opportunities/market informationHM could see many opportunities to growth in contrasted markets as is a company that have great presence all over the world. However, it is not established in all countries, so if it wants to become a bigger brand, it should observe what opportunities offered each country and see if it is profitable or not.Economies of scale-learning curveBeing internationalized, offers HM the advantage of the economies of scale as it could produce high amount of clothes at the same time with very low costs.(Hollensen, S., 2007)Reactive MotivesCompetitive pressureHM could be scared for example of the competitive pressure of Inditex as it has a great strategy that helps it to continue in the top level. If the company see that other brands are g rowing all over the world and are gaining customers and getting profits, the not internationalised company also would want to get all that. So for that reason, HM would like to enter in more and more countries so as to be a great company.Domestic market downcast and saturatedHM was created in Sweden many years ago, but as the market was becoming so small to compete there, it decided to enter in new countries so as to growth its presence.Extend sales of seasonal productsAs maybe the demand in the home country is not very big and it does not give the opportunity for the company to get the desire profits, they would find new opportunities to get what they want in foreign countries.(Hollensen, S., 2007)Appendix How to choose the target market?Targeting is the action of evaluating and equivalence the different groups of consumers and chooses which is the most adequate for the company. Companies have to base their research in 3 pointsCurrent segment and the growth It result be copio us profitable to the company to centre only in that segment?Competitive intensity and potential competition If that segment has a great competition, it is suitable to enter in?Compatibility and feasibility If that segment give problems to the companies, could another company catch them?(Keegan, W.J. and Schlegelmilch, B.B., 2001)When HM creates its brand he had surely been thinking about these points at the time of creating its designs. When the companies are creating their collections they must be thinking on the target market as they are the wanted customers and they should create those clothes appeals to them.Appendix Market selection CriteriaMarket PotentialHere the company should analyse if the market satisfied completely the customer and also if the customers has the incumbent major power to purchase the product that the old retailers offer them. (International market selection, 2004)Market SizeThe companies need to observe how much of the market it can accept they could af ford.Market growthThey have to observe how much have enceinte this sector in that country during all the years so as to know if they would find an increase or a decrease in the industry.Competitive IntensityThe Company have to make a great research relating with the competitors of the industry in that country so as to know in what position they are and how strong are the competitors.Entry prohibitionIn all countries are entry barriers to foreign companies so as to protect the future of the home country industries. They should make many deals so as to finally get into a new market. semipolitical EnvironmentThe government of a country affects a lot the business life because of the changing policies, regulations and laws. Furthermore, the government of each of the country is who choose which businesses will hold protection and which is going to face an open competition. Furthermore, the political stability of a country will affect the action that government will take, and finally th at actions will have many influences in an enterprise. (Sirkeci, I. and Cawley, R., 2012)Economic Environment immediately the economy has change radically, due to that factor, all countries are now potential targets for every company. When a company has to make research in global marketing, the economy dimension of the world is crucial as it has great influence in this point. (Keegan, W.J., Schelegelmilch, B.B., 2001)Demographic StructureThe company should observe how has change the demographic in the object country so as to control the organic evolution of the Target customer.Purchasing PowerIt has to know how is the purchasing power of the objective customer so as to know if they are going to get benefits or loses in that country.InfrastructureThe retailers need to observe if the infrastructure of the country is good or not in order to build factories and stores in that country. The country must have strong infrastructure so as to build powerful companies, strong social, economi c, aerialinfrastructure.Appendix Philippines and PortugalSo as to choose the most appropriate country to enter in, many things must be analysed as it can be seen in the paper. However, not only those shown points are important, there many other things like the gross domestic product, unemployment rate, macrocosm, innovation that should be take into account when an enterprise want to be opened in that country.PhilippinesPopulation 93,6millionsGDB per capita 2,007$Infraestructure 3,1Macroeconomic environment 5Goods market efficiency 4,1Having a look to these different score between 1-7, it is clear that Portugal is much more secure country to establish their company. Although the most relevant dates had been explained before in the pages, these are also very important at the time of choosing the country to enter in. So finally, Portugal is the country that will be analysed for the report. repel market efficiency 3,9Financial market development 4technical circle 4,6PortugalPopulation 10,7 millionsGDP per capita 21,559$Infraestructure 5,5Macroeconomic environment 4,2Goods market efficiency 4,3Labor market efficiency 3,8Financial market development 4Technological readiness 5,3(The Global Competitiveness report, 2012-2013)Appendix PortugalPolitical EnvironmentPortugal has a constitutional republic and a parliamentary system in which a semi presidential regime is established. The prime minister is elective every four years and is the person who led the government, furthermore, the president of the government is elected every five years.(Doing business in Portugal, 2012)Economic EnvironmentThere can find many industries that have established their main company in Portugal, for example, in the case of Inditex, it has one factory there, as the output is cheaper than in Spain. But although been a developed and high income country, it has the lowest GDP in Western Europe, and besides, the population has the lowest purchasing power of the European Union.(Economic of Po rtugal, Wikipedia, 2012)Regulatory EnvironmentThe Law 18/2003 In Portugal is create to maintain a competitive economy, not to have an unfair competitive and so heavy one. The law prohibited the company to make agreements that would affect the competition between economic agents in national territory. In addition to this, the companies are not allowed to make a very aggressive competition so as not to affect the sector in that country.(Doing business in Portugal, 2012)Fashion industryNowadays the textile industry in Portugal represents alone under the 10% of outputs. The situation in Portugal is not the best, but the companies that are surviving are having great profits, so people are seen as an optimist market. Many different brands produce their clothes in Portugal like Fred Perry, Inditex, capital of Minnesota Smith because the process is not as expensive as in other European countries, , however, although the industry is surviving, all the companies has suffered losses during th e financial crisis. each type of industry are suffering now due to the 2008 financial crisis, in many countries many companies closed their factories, nevertheless, the textile industry in Portugal is growing up again ,so slowly, but is growing. Every brand are getting now profits, so for HM it could be a great opportunity as the industry is having good results nowadays. Besides, it must be said that HMs strategy is very similar to Inditex ones, its clothes are so cheap and finally a country that is suffering a lot because of the crisis , population wants to have the opportunity to buy cheap fashionable clothes. Inditex is having great results in the country, so as HM prices are cheaper, why it would not get many profits? Portugal as I said, can offer HM many great advantages.(UK reuters, 2012)Barriers to enter in countryThere many barriers in all countries for different companies that want to establish their brand there are (Hollensen, S., 2007)General Market RisksThe main barrier s are the great fight that HM could find in Portugal, the different culture and language, because the Swedish and Portuguese people are so different at the time of working and also the language is totally different. In addition to this, it is no low-cal to find a new distributor in a foreign country, they should make alliances an all of that work so as to get a great position, and finally, it must be said that it is a very ticklish work to adapt all the company for that new culture and make a great company overseas.Commercial RisksAlthough Portugal is in Europe too, there are always delays in the delivering of the export products or some damages in them. Beside this, there are always changes in rates and that could have a great influence in the cost of a company.Political RisksThis subject is a little bit special companies have to take caution as politics have great influences in all countries. HM have to take into account how is the law of the exports in Portugal, what type of restrictions have impose the government, the thoughts of the citizensOpportunities of entering in the PortugalInvesting in Portugal it would give companies many advantages for many different reasons (Doing business in Portugal, 2012)Strategic access to marketDue to the Portugal economic openness and also because of its strategic geographical position it can offer great opportunities to different companies between EU and also different markets. As it has relations with Brazil and is near Africa, it offers great advantages so as to make exports and imports.Cost competitive, qualified and flexible manpowerThe Portuguese employers are known for having great attitudes at the time of adapting their self to new technologies, strategies and so on.Excellent environment to live and workIt is a country that offers the companies very secure areas and ensure the security for their production, and so on as it is very pacific place.InfrastructureAs during the last year Portugal has made great inv estment so as to modernizing its communication infrastructures, it is great country to establish a company as it can be adapted very easily to the new technologies that the company will get hold of with it.Appendix CompetitorsThreats of New entranceRivalry among existing competitorsThreat of alternative products or servicesBargaining power of buyersBargaining power of suppliers(Keegan, W.J. and Schlegelmilch, B.B., 2001)Market 5 forcesReferring to HM, although it is a great company, its major competitor is doing everything much better than it does. HM it would be the new entrance in that country and of transmission line all those competitors like Inditex, Cortefiel and so on, would be threat of it as they would need to fight with one more company. However, knowing that new entrance, those companies may start making much more deals with the suppliers so as to have the ability to offer better products and service to their customers and not lose them. Finally, HM has a great positiv e factor to the consumers that could be a great advantage to its competitors. It makes many alliances with famous designers like Versace, Moschino in order to create new collection that are entrancing to young consumers as they feel with higher(prenominal) status. Inditex should be worry about that as luxury brands are so attractive to consumers, but if it continuous doing a hard work it will be as everywhere the winner of the sector also in Portugal.Appendix ASOSASOS is an online beauty store that provides the customer many products of different brands in very cheap prices. That is, the consumer can buy in the same website clothes from many different brands like Adidas, Armani, Topshop it sales hundreds of brands, thats why it became so attractive to the customer, because it can find in the same place clothes from everywhere.ASOS was created for the first time in United Kingdom in 2000, but them while it was gaining presence in whole Britain it started going abroad and gaining pre sence in many countries of Europe. After that, the market of US was prepared to ASOS arrival as everyone wants to have the opportunity to buy many brands product in the same place.(ASOS, 2012)Appendix MOFALDAModalfa is a Portuguese fashion brand that offer the customer very fashionable clothes in a cheap prices. In Portugal, as I explained before, it is a great competitor for HM as it offers the customer similar opportunities as HM does.(Modalfa, 2012)Appendix CORTEFIELCortefiel is the first brand created by Cortefiel group in 1946, which offer the customer an bewitching and comfortable style with very high quality. With this personal style, Spanish brand has open its road for many countries and it is very strong competitor for many other companies. Its target customer is based on men and women between 35-45 years, and although HM is turn to to young people, finally all type of consumers are important for every company. (Cortefiel, 2012)Appendix CACA is a fashion company that has presence in 20 different countries of Europe. People have a very good perception about CA, it offers 10000 different products in all the countries, and although its high prices, the products have very high quality, the clothes lasts for years so people do not mind to pay more for those clothes. (CA, 2012)Appendix InditexThe Inditex group is the most powerful competitor of HM. Inditex has many different brands inside, that are very famous and makes it the more and more strong everydayZARA Zara has presence in 85 countries and it has opened 1671 stores in the best places of the cities. For Zara there is no any limit, they want to be in all the countries of the world in the future, and due to its great strategy it can get it as it is opening new stores every day.Pull Bear It was create in 1991 curiously for young people as it has very juvenile style. Is it one of the most profitable brand in terms of Urban clothes as every young people go there to get urban style clothes.Massimo Dutt i It has 567 stores spread in 53 different countries. It offers Urban and day-by-day styles both for men and women, its target market is based on men and women adults, thats why the growth of the prices and the change in the style comparing with other brands.Bershka It was launched in 1998 and nowadays it has 839 stores in 63 different countries, and as it is known, it appeals fundamentally to the young target market.Stradivarius It produces clothes, accessories, shoes and its clothes are combination of elegant and hippie clothes that appeal a lot for young people.Oysho Oysho sells the current fashion trends in womens lingerie and intimate apparelZara Home It is specialised in home decoration and linen things that attract so much to women because of it reasonable prices.Uterqe It is the newest brand of Inditex and it is the most expensive brand of the group.(Inditex group, 2012)Zara is the most powerful brand of the group, is the main competitor of HM alone as I said. In the above image appear where Zara has its stores. (Zara targetmap, 2012)Appendix CustomersThe culture in which the consumers have been grew up have many influences in the p