Global Business on International Platform - Assignment Example

Global Business on International Platform by Department TABLE OF CONTENTS 1. Introduction 2. Global Business of retailing……………………………………………………..1 3. Market entry strategy…………………………………………………………….2 4. Success of International retailing…………………………………………………5 5. Customer service and retailing……………………………………………………7 6. Conclusion…………………………………………………………………………..8 7. References ………………………………………………………………………….9 8. Appendix…………………………………………………………………………….11 Introduction The global business chosen is retailing business of Priority Garments in UK. This is a garment business which sells clothing apparel and they operate locally but are planning soon to enter international market. The retail business working on an international platform needs to have a comprehensive marketing strategy to promote their business. In order to enter a foreign market ,the international retailer need to plan well in advance. E –tailing is a modern channel by which retail business can be expanded on an international basis. But the concern is that E- tailing is in a stage of infancy and need more advancement. The other marketing strategy are franchising, licensing and other mode of entries. It is important for the retail business, opening stores abroad retail business cannot succeed. The price of the product, the promotion strategy, store design and customer service of an international retail business should be appropriate for business to prosper. A company needs to look into many factors like political, environmental, social and technological when entering a international market. In an international business the governmental policies, weather condition, the needs and demands of people from various culture and technological influence affect the success of the business. Other factors like pricing and promotion strategy and customer service also affect the business promotion on an international platform. The company has to analyze the marketing strategy by taking into account ins strengths, weakness, opportunities and threats. In such a case this garment company will be able to enter the international business in a successful way. The strength and weaknesses of marketing strategies E- tailing Prospects E-tailing is a business operation of retailing which occur with the help of internet. It has been introduced in the 20th century and is a business to consumer transaction. According to Rouse (2005)“E-tailing began to work for some major corporations and smaller entrepreneurs as early as 1997 when Dell Computer reported multimillion dollar orders taken at its Web site”. In e- tailing the online catalogues and business management is done with the help of software tools. This new technological retailing is the new trend in Western countries. In this type of retailing, the consumer interacts with virtual shops to purchase their services and products. In this system, the customer can pay online acquire products by courier and shipping service. Since a decade there had been a hike in E- tailing in western countries however it is still in an infancy stage. Across the world, there is lot of retail business sites but the problem is that lot of companies are still worse at this business process. In U.S only less percentage of sales take place through E – tailing. As per UDEL (2005) “ E-tailing currently accounts for 2% of retail purchases in the U.S. ($17.2 bn fourth quarter 2003; up more than 25% from the fourth quarter 2002)”. Many provisions in the e-tailing are not viable for consumers to get affiliated with .The payment procedures for e- tailing is not fool proof and the customer often feel insecure with this system. Many a times, the e- tailing is not a customer – oriented operation and they avoid websites. As per William (2011)“The websites are considered most important because lack of aesthetics sense in the websites consumers may switch to another store”. So E-tailing needs to be easier for consumers to handle and process. The graphic presentation of the catalogues is also a concern in E- tail sector as technology is still evolving. E- Tailing is an effective marketing platform but unless the products are digital the delivery of the product need to be considered. The reason is that the consumer fear that they may not get the product for which they paid. The websites of retailing business does appeal to consumer but delivery practice need to be flawless for it to be successful. The customers should be given opportunity to track the delivery status of their product. Another issue with E- tailing is that it is more expensive than normal purchase as a percentage of money goes to credit card companies. So E- tailing needs to install cheaper way of payment process. Also privacy factor in E– tailing are minimum because the personal information given by customers is not always secure. As per News 24, (2014) “One of the main reasons why people don’t shop online is the fear for their cards being cloned.  This is a possibility, but there are precautions you can take to make sure your transaction is a safe one”. So e- trust should be more developed to ensure customer data safety. Also the E- tailing is in infancy because the web design is not efficient enough to carry out a smooth shopping experience for many E- tailing sites. Other market entry Strategy for Priority Garments E- tailing is a potential marketing entry way for international retailers; however many other methods of market entry are available to Priority Garments. Some of the methods are as follows. a) Export/import agents - Export and import agents or trading companies can be used by retailers to enter international trade. This is apt for businesses which have less experience with international business environment. These agents have good connection with many international marketers. So the new retail business gets more chance to sell product to intended market. However a commission is charged by agents that may not be acceptable for some retailers. According to Arnold(2003)“Second, agents often operate on a commission basis, and they do not actually buy the goods from the international vendor, so there is a credit and cash flow risk that is not present in distributor arrangements”. b) Piggybacking – Though it is a rare form of market entry it is a worth try. It is a highly beneficial channel to explore by international retailers. Here, the vendor may be given a spare space on plane or ship and foreign license to sell by an international business trader. In this way, the retailer can have access to many countries in marketing their goods. As per Mehra (2011,pg 1-16) “ A piggybacking arrangement allows the unbranded retailer to reach the same number of customers as the branded retailer without incurring any corresponding search advertising costs”. Piggybacking Strategy Low cost Less regulations Easy marketing c)Franchising – Franchising is one of the potential market entry beneficial to the internationalizing retailers. This is a less explored market entry method by retailers. This is an effective way for the retailers to introduce their products and services to the world business market. Franchising Strategy Control at moderate ratio Intangible exchanging facility Flexibility and dynamism Recognition in international market. As per Holmes (2003) “Both among prospective owners and with the consuming public, franchise systems generally have a superior image over other distribution approaches, particularly if there is uniformity as to retail presentation, marketing methodology, operational compliance, etc., precisely the things which are easier to achieve within a franchise framework”. d) Licensing – This is another mode of market entry for this retailer .This is suitable for business which has assets which are protected and legal in nature. In this mode of entry, the vendors get the benefit of media distribution and production. It is a potential method of entering foreign market. According to LIMA (2014)“Licensing is a marketing and brand extension tool that is widely used by everyone from major corporations to the smallest of small business”. However, the licensing gives autonomy to for local licensee on the designing of product and products need to be innovative. Licensing Strategy Protection of Intellectual property Good Profitability A identity of brand Success of Priority Garments It is a norm among businesses to open stores abroad without intense research and planning. A business will not succeed only if it opens stores abroad as a part of their business expansion. Any business needs to analyze and evaluate its long term sustainability before they launch stores on international platform. An international business can face many crises during its journey. According to Constanza (2011,pg149-69) “Regulatory, geographical, economic, cultural, psychic and administrative differences between countries are seen as generating costs, risks, and barriers for internationalizing firms”. So expanding alone cannot ensure a successful internationalization. The price of the product, its quality and promotion has an important role in internalization of a retail business. These factors have a credible role to play it determining the prosperity and longevity of a business. Price is an important factor as there are various products which are of lesser price in foreign market which can hinder the success of retailers in foreign countries. In same manner the quality of the product or service should be attractive enough to the customers in international platform. The consumer behavior and choices of international consumers can be a threat to internationalization and only expanding cannot make it a success. Pricing strategy The market environment Price of competitor Input costs Trade margins Please see Appendix 1 The promotion campaigns of international market are huge and if it lacks with the competitors it is not easy for business to survive. The promotion need to assure the customers that the product will satisfy their needs. The promotion strategy for an international trade need to be competitive, hi – tech and innovative to overcome the competition in the foreign business market.According to Khan (2011,pg 445-49) “ There is a considerable change in the international business environment, which is said to be an environment of many challenges and many opportunities”. Promotional Strategy Advertising Selling Sales promotion Public Relation The Priority Garments needs to assure that legal formalities of a forieng country of business is complied with .As they expands their business they face more legal complications. The Priority Garments need to study and comply with legal formalities in relation to trade,labor law and other company laws. Certain countries also prohibit certain products due to social, religious or cultural reasons. So all these factors should be kept in mind by the Priority Garments to retain their business. Also the financial stability of the business needs to be strong. According to He (2011,pg.48-57) “Internationalization requires solid financial ability. The whole issues should be addressed under the background of global context. Factors like the global financial crisis and changes of monetary policy should be brought into the analysis since they have a direct impact on the expansion and branding of nearly all the firms which are on their way of internationalization”. Apart , from all this the store design also means a lot for the business success.The store theme need to be in aligns with all other stores and must be pleasing and innovative. The customer needs to get attracted, safe and comfortable in a store they purchase. Customer Service and retailing In any business whether local or international, customers are the reason for its success or failure. A customer decides to make a business success or a failure. It is a well known fact that “customer is king” and hence their preference and choices comes first. A customer service is what makes an international retailer a success .Customer service of a retailer give a competitive advantage over other business. According to Times 100 (1995) “Good customer service involves developing bonds with customers, hopefully leading to long term relationships” It creates advantages for both customers and the business alike .Customer service means understanding the emotions and preferences of the customer and acting according. If an international retailer wants to stay long in business then the customer service needs to be optimal. The customer service strategy of every business should be different from that of their rivals. This ensures that they get more customers who are loyal and devoted .The customer needs, preferences are different in every country and this should be considered by business while formulating their customer service agenda. According to Dumon (2013) “When it comes to the business world, customer service is one of the most important aspects of having a successful business”. In international retail business the customer service is even more important as the competition is fierce. The business needs to employ many strategies and agendas to prosper the business. The customer service has many tactics and can make customer loyal towards any products. The best way of customer service is to make them comfortable. When customers visit the stores they should be given special treatment and must given attention service without delay. Time is precious for people and not attending to them on time can make customers feel insulted and disrespected. The customers should be given advices and opinion which they can benefit. They can include promotional schemes, discount offers and other loyalty programs which can make customers attracted to their product. According to Stefani (2013) “When we have satisfied our customers, they not only help us grow by continuing to do business with us, but recommend us to friends and associates as well. Customer service is a word of mouth generates skill and it can earn more customers than advertisement and promotions. A business verily needs to foresee the taste and preferences of their potential customer. As per Dawn(2011,pg 101-15) “To attract and retain the customers, the retailers particularly the E -tailers have to take more efforts than to just attract. It is very easy to lose an e-customer” .An efficient retailer effectively understands the needs and desires of their potential market segment. Customer service is a competitive advantage of every business. As per Williams (2011) “Effective customer service is far more than merely being caught by a mystery shopper saying something nice to a customer”. Please see Appendix 2 Conclusion Every business has risks and challenges and retailing business in a global arena is fierce and competitive. The retailers mostly need to take consultant advice to make their business operation a success. A retailer needs to make best use of E- tailing, many market entry modes and business strategies to prosper .The best way to keep customer is through comprehensive customer service. Treating the customer in a professional manner is a better way to win and keep them. Many times despite of quality, a customer may prefer some other product because of the inadequacy of the employees and customer service approach. The challenges the garment business can be from various aspects like competitors, technology, customers and political environment. To enter a global business is not easy when there is fierce competition from global businesses. Since countries like China and India are introducing garments at a cheaper rate the companies from UK can face threat. Also technology needs to sophisticated in the countries where the retailer is doing business do that he can promote sales by E-tailing. Also the customer should be reached out effectively and this needs proper promotion and advertisement campaign which can be a pressure on the company. The political aspects like legality, trade laws differ from nation to nation and such things can influence the success of the company. References Arnold,D. 2003. Strategies for entering and developing international markets. [ONLINE] Available at: http://www.ftpress.com/articles/article.aspx?p=101588&seqNum=2. [Accessed 17 February 14]. Constanza, B, 2004. AN INSTITUTIONAL PERSPECTIVE ON. International Review of Retail, Distribution, and Consumer, 14/2, 149-69. Dawn, S.K, 2011. E-TAILING IN INDIA: ITS ISSUES, OPPORTUNITIES AND EFFECTIVE STRATEGIES FOR GROWTH AND DEVELOPMENT. International Journal of Multidiscipli nary Research, 1/3, 101-15 Dumon,M. 2013. Why great customer service is important. [ONLINE] Available at: http://www.examiner.com/article/why-great-customer-service-is-important. [Accessed 17 February 14 Holmes, D. 2003. THE ADVANTAGES AND. [ONLINE] Available at: http://www.holmeslo fstrom .com /z_pdf/articles/franchisors/Fran%20Advantages.pdf. [Accessed 17 February 14]. Khan, N, 2011. Crisis in International Business Environment in India. Journal of Emerging Trends in Economics and Management Sciences, 2/5, 445-49. LIMA. 2014. Introduction to Licensing. [ONLINE] Available at: http://www.licensing.org/education/introduction-to-licensing/. [Accessed 17 February 14]. Mehra, A, 2011. Competitive Advertising Strategies for Online Retailers. UNCC, 3/8, 1-16. News 24. 2014. eTailing: Good or Bad. [ONLINE] Available at: http://www.news24.com/MyN ew s24/eTailing-Good-or-Bad-20140131. [Accessed 17 February 14]. He, S, 2011. The Influential Factors on Internationalization of the SMEs in China. Research in World Economy, 2/1, 48-57. Rouse, Margaret. "e - tailing." http://searchcio.techtarget.com. Tech Target, 2005. Web. 18 Feb. 2014. . Stefani,A. 2013. Five Essential Elements for Great Customer Service. [ONLINE] Available at: http://www.destinationcrm.com/Articles/Web-Exclusives/Viewpoints/Five-Essential-Elements-for-Great-Customer-Service-90458.aspx. [Accessed 17 February 14]. Times 100. 1995. Using customer service to position a business.[ONLINE] Available at: http://businesscasestudies.co.uk/first-direct/using-customer-service-to-position-a-business/what-is-customer-service.html#axzz2tfyjjj4s. [Accessed 17 February 14]. UDEL. 2004. Definition of Retailing and its application to E-tailing. [ONLINE] Available at: http://www.udel.edu/alex/online/market5.html. [Accessed 17 February 14]. William, A. 2011. The 5 elements of retail customer service. [ONLINE] Available at: http://2bbiz.co.za/blog/2011/07/the-5-elements-of-retail-customer-service/. [Accessed 17 February 14]. Appendix Appendix 1 Pricing strategy Appendix 2 -Customer service strategy Read More