The Global Environment of Business - Case Study Example

?The Global Environment of Business Table of Contents Question 3 Question 2 4 Question 3 6 References 8 Question Tommy Hilfiger is principally regarded as one of the foremost lifestyle brands throughout the globe which attained immense success since its introduction in the worldwide business market during the year 1988. The brand intends to offer greater quality as well as fashion value to its worldwide customers. The various products belonging to Tommy Hilfiger include sportswear, apparels, accessories, furnishings and fragrances among others. Relating to the business of Hilfiger, it has been apparently observed that there pertain certain significant factors which ultimately lead to higher prices particularly in Europe as compared to the lifestyle brand market in the US. With this concern, the brand adopted an important decision concerning setting higher prices for its broad array of products particularly in the European region in comparison with the US owing to the reason that the choices along with the preferences of the customers are quite dissimilar in the two business markets by a greater extent. In this similar context, one of the crucial factors that lead towards higher prices of lifestyle brands in Europe as compared to the US can be identified as the expensive operational costs. This can be justified with reference to the fact that Europe based customers are more trendy in nature than the US wherein Hilfiger had to raise its operational costs in order to comply with the requirements of the trendy European customers. Apart from the factor concerning higher operational costs, the other critical aspect which led to higher prices of Hilfiger products in Europe can be identified as the concentration of the retail market. In addition, the nature as well as the preferences of the European customers can also be regarded as the other critical factors that led towards higher prices in the European region than compared to the US. In this similar concern, it can be affirmed from a broader perspective that the customers belonging to Europe were much demanding of superior quality of products or trendy products resulting in higher prices for different product lines of Hilfiger (Uclan, 2013). After acquiring a brief idea about the different crucial factors that led to higher prices in Europe as compared to the US, it can be affirmed that Hilfiger might experience certain major problems especially in Europe. In this similar background, one of the vital problems that Hilfiger might face is attracting along with retaining the customers from its targeted market segment, buying its different collection of products or brands. Furthermore, the other major problem that Hilfiger might encounter from having higher prices in the European region is decreased profitability along with productivity resulting in hindered customer satisfaction and lower retention rates over the long run period. This in turn might also hamper the growth of the company in terms of its market shares within the European region by a substantial extent and restrict its future growth prospects. To be mentioned in this context, the other problem that might be encountered by Hilfiger owing to its higher prices in Europe as compared to the US, is the inability to compete with its major rivalries and thereby accomplishing superior competitive position over its chief business market competitors in terms of weakening strategy in the area of brand positioning (Gitman & McDaniel, 2008). Question 2 It has been apparently observed that Hilfiger had to experience different national preferences while performing its operational functions in several nations throughout the globe applying a widely diversified strategic process. In order to effectively deal with various national preferences and facilitate the brand towards betterment, especially in the US, the CEO of the brand intended to adopt and follow the strategy of harmonising its European and the US collections focusing on increasing market share and customer satisfaction (Uclan, 2013). In this regard, the strategy of harmonising represents introducing along with implementing pioneering technological advancements and minimising any sort of strategic gap resulting in supporting the organisations to develop their respective work quality by a considerable extent. It has been apparently observed in this context that the modern day organisations belonging attempt to largely prioritise the strategy of harmonising for the purpose of availing several important benefits with the acquisition of greater benefits from globalisation effects. These benefits encompass enhancing as well as raising operational effectiveness along with compliance, lessening overall transaction as well as operational costs and thereby, obtaining substantial global business growth among others (Zlotnik & Wolf, 2003). Relating to the case of Hilfiger brand, it is to be stated that the brand might face certain crucial problems while harmonising its European and the US collections for the purpose of moving Hilfiger towards more upmarket, especially in the US region. In this regard, the critical problems for Hilfiger concerning harmonising its European and the US collections might generate from inconsistent situations concerning industrial relations and varying legal regulations among others. Notably, non-adherence towards the respective legal regulations, which are distinctively practiced in both the nations, might affect Hilfiger in harmonising its European and the US collections effectually resulting in decreased operational performances and lessened overall profitability along with productivity at large. It is worth mentioning in this regard that the factors like varying labour laws and inconsistent legal regulations prevailing in different business or operational nations might certainly impose an adverse impact upon Hilfiger in terms of restricting the brand towards accomplishing its predetermined business goals by a greater level (Eurofound, 2011). Most significantly, in order to improve the brand positioning and competitive stance of Hilfiger, especially in the US, it can be regarded as quite indispensable for the brand to fully comprehend the choices and the preferences of the customers in accordance with the persisting external environmental scenario which are again likely to be distinctive in the US and the European region. After acquiring a brief idea about the problems that might be faced by Hilfiger in harmonising its European and the US collections, it can be affirmed that the brand would require adopting execute certain major actions in order to gain the desired level of competency in the international market and its brand positioning stance. For instance, to avoid legal disruptions and c complexities, Hilfiger should comply with the respective legal regulations prevailing in different nations throughout the globe where it operates or intends to do so within its short term objectives. Successful compliance with different legal regulations prevailing in diverse business environment in various nations would ultimately support Hilfiger towards effectually accommodating dissimilar commercial purposes more aptly and profitably. Apart from complying with various legal regulations, Hilfiger must focus on developing its overall business procedures in terms of its flexibility and cost as well as time effectiveness by which it can make the harmonisation strategy successful. Most significantly, Hilfiger can differentiate its brand separately for the purpose of making this strategy successful. Additionally, generating effectual advertising and prestige placement might also be effective for Hilfiger to develop its harmonisation policy as a successful strategy (Richen & Steinhorst, 2005). Furthermore, in order to make the harmonisation policy successful, Hilfiger should effectively perform an appropriate market research which would facilitate or assist it towards identifying its targeted customers belonging to the upscale business market. Thus, on the basis of the above discussion, it can be affirmed that the policy of harmonisation can create a ‘win-win situation’ for any organisation or a business entity if it is managed and handled cautiously. Question 3 There pertain certain significant and effective strategies that can be recommended for different clothing companies belonging to exterior Italy and France for the purpose of mitigating the optimistic images of “made in France” and “made in Italy”. In this similar context, one of the important suggestions for the clothing companies can be the formation of an attractive as well as a dynamic design centre, especially in the region of Italy or France. This particular establishment of design centre shall be quite supporting for the clothing companies in making their broad assortment of products to be analytically defined as “designed in France” and “design in Italy”. Another valuable recommendation for the clothing companies might be the endorsement of famous personalities or celebrities through creative advertising and prestige positioning. It is worth mentioning that the different clothing companies which are foreign to Italy and France might produce a certain portion of the components with low costs in other nations apart from these regions and then shift the unfinished components to these target markets with the motive of completing the finish brands or products which can be beneficial in obtaining the benefits of the already persisting customer preferences towards “made in France” and “made in Italy” brands (Paul, 2008). Relating to the case of Hilfiger, it has been apparently observed that the brand possessed a considerable portion of market share and greater profitability in the business market of Europe. Thus, it can be suggested to Hilfiger that the brand might reinforce the activities linked with creative advertising along with prestige positioning particularly in the European business market by engaging renowned personalities or celebrities using their broad array of product lines. It is suggestible in this context that Hilfiger might substantially invest on introducing along with developing production facilities specifically in the European region with the intention of availing the benefit of the optimistic image pertaining in respect to the tags of “made in France” and “made in Italy” (Daniels, 2010). References Daniels, J. D., 2010. International Business: Environments and Operations, 12/e (New Edition). Pearson Education India. Eurofound, 2011. Definitions. Harmonisation. Gitman, L. J. & McDaniel, C. D., 2008. The Future of Business: The Essentials. Cengage Learning. Paul, J., 2008. International Business. PHI Learning Pvt. Ltd. Richen, A. & Steinhorst, A., 2005. Application of Standardisation and Harmonisation. Standardization or Harmonization. Uclan, 2013. Appendices. Tommy Hilfiger: Clothes Make the Man and Vice Versa. Zlotnik, J. H. P. H. & Wolf, C., 2003. Advances in Cross-national Comparison: A European Working Book for Demographic and Socio-economic Variables. Springer. Read More