Strategy Development Directions - Ansoff Matrix in Mexico and India - Essay Example

?Executive Summary The ability to expand into international regions with foreign direct investment, or FDI, is one which many brands and industries are considering. Developing countries are one of the prime targets used for those interested in developing and expanding overseas. Fashion retail is one of the main areas of consideration that is targeting various areas around the globe for international trends in design and looks. There are specific retail stores that are looking into expansion to heighten the economy of developing nations and to begin altering the trade that is developing into global aspects (Helpman, 2006). When looking at the exchange of new developments and the economy which is expanding globally, there are several ways in which the fashion industry can help. Two regions which this is being noted are in India and Mexico. These are two of the fastest growing regions in terms of global expansion, including technology, fashion and other global interests (Lemaire, 2011). The ability to invest within these regions can provide different types of insight into the expansion of corporations within the areas. The country of India was chosen first because of the continuous debates that are appearing in terms of expansion, specifically with retail industries. Currently, India is experiencing a strong inflation from the government. To counter-act this, measures with the government and with developed countries are taking place, specifically by opening the doors to new prospects and economic stimulation. Places such as Wal – Mart are bidding to become some of the first retail entities that are in India. At the same time, the fashion is growing expansively in areas such as Mumbai and Delhi. Fashion weeks and growth from entertainment entities, such as Bollywood, are continuing to grow expansively and offer more in terms of fashion retail. The movement into developing with the country, as well as the opportunities and prospects within this region are allowing the FDI for fashion retail to be a main opportunity for the country (Chakraborty, 2008). Mexico was also chosen because of the initiatives that are currently taking place within the country. For the past 20 years, Mexico has gone through several changes in development, specifically because of the economic growth and development, political changes and the social movement toward becoming global. While there have been fluctuations in opening or closing the region, the free trade agreements and the initiatives to trade with other regions has allowed the country to begin develop at a rapid pace. Most that are in Mexico are now conscious of the global styles and expectations. This has been followed by structural changes within corporations and in society, as well as the continuous movement toward external pressures and opportunities within the country. While the country hasn’t yet developed a strong basis for international sales, there is opportunity because of the large amount of advancement in structure and global perspectives that have taken place through time (Blecker, 2007). Both countries are in a similar position in relation to FDI. Both are developing countries that are undergoing change politically and socially. The doors of both countries are opening, specifically because of free trade agreements, political affiliations and the need to expand in a different direction. This is being followed by the social and cultural awareness that is continuing to take place between both of the countries. For fashion retail, are several opportunities to move in at the beginning of investments and to begin creating a specific affiliation with the growth of the culture and the bridge to globalization that is now taking place in both regions. Strategy Development Directions There are several ways that the strategy for the countries can be developed to further the options for fashion retail. The first strategy considered will be through the theory of the Ansoff Matrix. Table 1 and 2 show how this matrix can be applied to both India and Mexico in terms of building and establishing global, fashion retail within the country. Table 1: Ansoff Matrix in India Present New Present Market Penetration – Current products of India are developed through areas such as Bollywood, bi-annual fashion shows and specific ethnic wear. This can be furthered with introducing new, global styles Product Development – products can combine the ethnic wear currently popular in India with newer trends and fusion wear, as well as options in Western styles. The Western styles can be added in over a time frame of 10-20 years after the fusion wear gains comfort and popularity within each region. New Market Development – To develop the market, the fashion retail will need to first examine the ethnic styles and trends that are in India. There will then be new innovations added into this to further the market and to slowly develop a style specific to the country Diversification – The advantage of moving into retail fashion within India is the ability to have continuously changing trends specific to the region. The three areas of diversity will include ethnic, fusion and Western / global wear. This will combine with diversity in seasonal trends that can help to identify new concepts within India for fashion forward youth and adults. (Chaterjee, 2011). Table 2: Ansoff Matrix in Mexico Present New Present Marketing Penetration – The current market is developing rapidly with the Mexico fashion week and budding designers that are setting new trends. The current change is bringing back the ‘tribal design’ of Mexico, combined with adding in the modern looks. The market is adding in cultural flairs while showing the global consciousness toward fashion because of the opening of places for trade. Product development – The products which can be developed can emerge with the evolutions now taking place in Mexico. Building collaborations with the up and coming designers, fusing the different concepts into the market and working with designers that understand how integrations of fashion retail can be added into Mexico will help with diversification and product building in he region. New Market Development - The development of the market can be presented with the current trends and styles, as well as the fast changes that are inclusive of tribal and authentic wear and the modern components that are a part of the fashion infrastructure. The focus for market development can be on the new and modern in fashion while working with fast changing trends that express global fashion. Diversification – The diversity for products in Mexico can be combined with the current changes in society with the structures in fashion that are now changing. The runway shows, elements of designers and the movement into global exchange can help with diversity that combines the authentic with the new and modern. Changing with the season can also be used to assist with the production of fashion for different consumers. (Fox News Latino, 2011). The foreign investments in both places show promise because of the emerging trends that are authentic in nature, as well as the recognition that the incorporation of global and Western looks can be a part of the fashion investments. The fashion retail then has the ability to work with a diverse market while providing more opportunities. The diversity in the market can consist of the fast changing trends that are now known globally, as well as the options for expanding with authentic and fusion wear and into the Western styles that are contemporary in nature. Since these specific alternatives are already a part of the market, the fashion retail will diversify what is available with specific designs that can fit with each culture. The business integration doesn’t have to be limited to the modern and contemporary styles, but can also be inclusive of supporting and collaborating with fashion designers that are budding in each region to further on the ideas with fashion retail. The changes will create a boom in the market valuation in each region, while allowing the investments to continue to bring a return from the development of fashion (Simard, 2006). Another strategy which can be considered is with the market consolidation and penetration in each region. The need to merge into India and Mexico are of primary importance to each region. Currently, this is taking place through political leaders, such as deals Obama is making for retail to merge into India as well as political exchanges with trade that are a part of Mexico from both the United States and Mexico. Beyond the political recognition of market penetration, are businesses and corporations that have already moved into the region with joint ventures and other applications which can be used to move into the economy. While the entry into the emerging economies is relatively new to both places, the social construct of India and Mexico is open to the new developments because of the rapid changes which are taking place socially and politically. This is giving both regions more opportunities for expansion and is altering the social applications to create more opportunities for new market development (Meyer, 2006). The best development to take is to work in partnership with the fashion designers and retails available while expanding over time to include branches of fashion development that has different styles and attracts segmented markets. The last component to consider is the new product development that is a part of the current market. The main component will need to be evaluated according to the market dynamics that are taking place in the current market. The number of FDI that is currently taking place is new in both regions, but is opening politically and economically. The gains as well as the expectation to expand because of the cultural and social awareness are also leading to new product development. At the same time, both regions have a developed area within fashion retail, which would make any investment similar to an expansion. If a joint venture is used, which later branches into new investments, then there will be the ability to continue to expand into new styles. The reason for this is to create products based on segmented markets by demographics and fashion styles. The segments will include fashion styles by authentic wear and Western wear, as well as differences for age groups and sizes that are more popular in each region. The ability to continue to introduce new product development will help with the life cycle from the foreign investment and will add into the quality of fashion products available in each region (Kaditi, 2011). Comparative Analysis The advantages of moving into both India and Mexico are similar because both countries are in similar positions politically, socially and economically. Both areas are moving into globalization in terms of growth and are known as currently expanding rapidly. The entertainment sector, acceptance of fashion shows and the emergence of new ideas for fashion are some of the areas that are continuing to develop socially. The globalization is being furthered by the ability to movie into new and expansive ideas which is being supported by the open trade agreements and the negotiations which political leaders are continuing to move into for expansion. This shows that both regions have the beginning opportunities and are creating infrastructures which can work globally in the production of new ideals within each region (Cazurra, 2008). India is ahead in this respect, specifically because of Bollywood and the fast opening of the region. However, Mexico’s free trade agreements, emerging fashion shows and the support of designers are also showing that there is support for regional expansion of fashion retail. While there are currently several opportunities in both regions, there are also disadvantages that are associated with this. While the countries are looking toward expansion, the currency and the exchanges don’t equal to the developed countries. India is currently going through inflation in relation to this. The currencies which are provided in both countries are at 25% the value of those in Western countries. The development in fashion is one which is only hitting those who have economic advantages over others. In India, the social elite and those connected to entertainment are known to be the most fashion forward, while others are continuing to move into more traditional fashions. In Mexico, the same concept holds with the fashion being inconsistent with trends because of economic gaps. Since there are several areas of the population which need to be developed more, this may widen the gap with the retail industry and may not provide fashion that can be accessible to all. For the investments to work in the best manner, there will need to be heavy advertising and the ability to work with the cultures economic measures that are shaping the region. If this is not done correctly, then the investment will be lost in both regions (Cazurra, 2008). The risks that are associated with the investment in the fashion sector follow the disadvantages that are a part of the investments. The current global determinants that are a part of the investment are not seen as stable and can easily be altered. If economic fluctuations in the region begin to occur, for instance, then the investment won’t work. The economic fluctuation may lead to individuals in the community that are unable to buy from the fashion retail and which turn to other aspects of the community for the different needs. Since there is the need to slowly develop products that fuse the ideas of fashion, there also may be competitors that offer lower prices or different quality that most are interested in, especially of different economic means. Creating a specific demand that is able to continuously match the economy remains one of the prime questions in the investment, as well as whether this can effectively be determined (Chowdhury, Mavrotas, 2006). The political and legal issues that are associated with both countries further the risks that are associated with the regions. The infrastructure of the political institutions in both countries differs, neither which completely accept the same values as developed countries. The foreign investment also implies capitalism, which is not associated with the countries or the political policies which follow. In India, there is resistance to retail coming into the area, specifically which is moving into conflict with the political leaders. In Mexico, the resistance comes from the free trade and how this has led several smaller business owners to lose their earnings because of the rapid development. The political opposition is then creating barriers to those interested in moving into either region. More important, the climate of the politics will determine the retail capacities and the need to move into different infrastructures for individuals and corporations moving into the region. Since globalization is only beginning to appear as a part of this, there is difficulty with the infrastructure and the inability to create a known entity for those in the region. The legal issues which follow move into the gap between types of companies and investments, such as employment and work policies, expectations for the retail stores and the need to follow a specific infrastructure for the success of the investment (Ramamurti, Doh, 2006). Mexico is making some of the changes with legal implications, such as changing infrastructures. However, India doesn’t have as many established infrastructures in retail with most stores being based on smaller entrepreneurs. For the investment of the fashion retail to work, there will need to be compliance with the political and legal structures of the company and will need to be an understanding that the joint ventures work more effectively because of the tie into the associated risks that are a part of the country. The last aspect of risks is from the social aspects created. The investment that is made from foreign compliance is one which holds a specific reputation among those that are linked socially to the environment. The social issues raised are based on the resistance to globalization and the desire to shop within the local and regional area. Both Mexico and India are experiencing the same contrasts between both regions. More important, if the fashion doesn’t comply with the social trends and fashions, then there won’t be the ability to expand into the region. The cultural and social issues are based on understanding the culture, attitudes and behaviors associated with the region and how the fashion retail can be integrated into the area to provide better opportunities for those that are interested in the region. Both India and Mexico are experiencing the same structural changes, shown specifically with the push for authentic and ethnic wear as well as the support which is being given to the local designers in the different regions. The incentives and market development, as well as the risks noted among both countries can be demonstrated in image 1 and 2, Porter’s Diamond. Image 1: Porter’s Diamond for India Image 2: Porter’s Diamond for Mexico Leadership and Management Changes The ability to offer FDI in both Mexico and India will have lower risks if there are leadership and management changes within the fashion retail industry. The main factor to consider is that there needs to be compliance with the social and cultural expectations that are a part of both regions. India, for instance, has Eastern values for business, meaning that group efforts and other aspects of working together are more important than the competitive and independent spirit. While Mexico slightly differs from these values, there is a community spirit engaged with employees that are within each region. The changes will need to be inclusive of the legal and social structures that are a part of both countries, specifically which will support the current community dynamics while allowing the investment to fit in with the current culture and structure of both regions (Stutung, 2005). The leadership and management that are within the main structure for the retail will need to be reflective of cultures not only with the main infrastructure, but also with the products that are offered. While both countries are experiencing revitalization in innovation within fashion, there are also other components that are structure within the culture. The products that are most popular are still reliant on the ethnic wear and the movement into concepts such as tribalism in Mexico. The products that are established will need to have a specific area of management that complies specifically with the regional designers and which is able to establish joint relationships. While the investment is coming from a foreign entity, the first ideal will be to establish relationships with those who are already interested in fashion in both regions. This will help with the development and growth while allowing the leadership to support what is now growing in both countries, as opposed to trying to create an ideal that is foreign to those in the region. This will lower the risk of society and culture that is looking at foreign investments as one that may cause complexities within the region, and instead will provide an investment for joint relationships that are within the community (Raukko, 2009). The example that can be used for India is based on the fashion retail that is based on the Bollywood ideals and the growth of the fashion shows through each region. These are now gaining global recognition because of the styles. However, most of the trends are based on the ethnic wears and production of modern trends that have a fusion style with the traditional ethnic wear of India. For an investment to work effectively there will be the need to connect to the entertainment professionals and those working in fashion. The production of new retail stores and trends can then be combined with an expansion of what is already starting to grow while offering support to an infrastructure which works within the culture. The same concept can be seen with the fashion shows of Mexico. The spotlight developed is on independent designers that are able to produce new trends while moving into the tribal and original concepts of Mexican styles. To invest with low risk, the financial management will need to go to those who are already budding and establishing trends in the region, while expecting growth to come from the internal areas of the culture. This will provide support to the fashion of the region, while offering long – term expansion that can slowly integrate and add in ideas and collaborations between the investors and those who are already working in the industry. The ability to work within different regions is one which is dependent on the right strategy and an investment that will provide more innovations to developing countries. Two rapid developing countries that are currently looking into several industries are Mexico and India. Both have similar advantages and risks in terms of economy, politics, society and cultural expectations. To move into an investment with these countries, is the ability to tap into one of the fastest growing areas of fashion. The fashion retail can be developed with investments with the concept of supporting the current growth and development of the industry, while allowing the cultural and legal expectations to remain the same in both countries. This can then be combined with the ability to move into the region with product growth and enhancement as globalization opens up and as the communities continue to expand with the innovations that are continuing to move into the fast pace of fashion innovations. By investing in this specific sector in both countries, there will be a strategy to support what is currently beginning to open into a global market within both countries. References Lemaire, JP. 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