International Marketing - The Harvey Nichols - Case Study Example

International Marketing: The Harvey Nichols Case Study By: International Marketing: The Harvey Nichols Case Study 1.0 Introduction Several business experts have in the past reaffirmed that organizations need to venture into international markets for them to develop their products into global brands. This hypothesis has since then been corroborated by the global success of several establishments across various sectors of the economy such as Apple, BMW, Nike, IKEA and Louis Vuitton among other organizations. From the time when it opened its doors in Knightsbridge in the year 1831, Harvey Nichols has majorly focused on the need to understand the demands of the ever-fluctuating market, thereby dealing in cutting-edge designer brands and luxury retail (International Marketing Theory and Conference 2011, pg. 83). In as much as a substantial portion of Harvey Nichols’ earnings have resulted from the U.K market, the organization has similarly benefited from the international market, particularly from the retail stores in Turkey, Ireland, Riyadh, Dubai and Hong Kong. Late last year, Harvey Nichols laid bare its plans of tapping into the impetus Qatari market by opening up a new store at the Doha Festival City Shopping Area in partnership with the Qatari Business Group. Whereas such an approach would increase the organization’s earnings and market share, it is imperative for the management of Harvey Nichols and the entire workforce to employ business and marketing strategies that are in line with the Qatari market. Consequently, this report aims to provide more insight on the principal managerial policies and distribution systems that the firm should employ in order to make the best out of the Qatari market. Similarly, the project focuses on methods that Harvey Nichols should employ in identifying potential markets, as well as implications that different cultures can have on consumer behavior. 2.0 Situation Analysis 2.1 Macro Analysis: PESTLE Tool The PESTLE tool is essentially a simple though extensively used platform that organizations employ to keep track of the political, economic, socio-cultural, technological and legal developments within a particular environment. Carrying out macro environment analysis would enable Harvey Nichols understand some of the forces that operate within its current and potential markets, thereby enabling it to exploit available opportunities. At the same time, implement mechanisms that enable it overcome prospective challenges within the environment. Political: Whereas Harvey Nichols has enjoyed a substantial share of the U.K market, the organization has failed to take full advantage of the whole market. This is particularly because of the decision by the U.K government to be cautious on spending, and reduce its spending budget allocation, for the move has prompted several potential customers within the market to monitor keenly their income (Czinkota et al 2011, pg. 161). That notwithstanding, it is imperative to note that the Qatari administration has put in place ideal fiscal policies, most of which are likely to favor the operations of Harvey Nichols within the region. Similarly, the high degree of political stability in Qatar makes the nation a perfect location for Harvey Nichols to explore. Economic: The enhanced rate of commercial growth in various European and Middle East nations has undeniably made it easier for Harvey Nichols to open its doors in several cities such as Kuwait, Azerbaijan, Dubai and New York. The firm has similarly taken advantage of the increased number of high-income earners and extensive percentage of middle-class earners (Czinkota et al 2013, pg. 161). In identifying potential markets, Harvey Nichols should assess the rate of inflation in various countries and prefer those whose rates of inflation are under control. Nonetheless, it is imperative to note that enhanced customer confidence has significantly contributed to the success of the organization thus far. Socio-Cultural: The operations of Harvey Nichols have been enhanced in various nations because many of the middle-aged citizens desire to be associated with a specific class. In like manner, the firm has greatly benefited from youths who exhibit the outgoing nature and prefer being associated with off the hook products and services. One of the major setbacks that the organization continues to face is lack of brand knowledge within particular markets (Czinkota et al 2013, pg. 163). Consequently, it should consider opting for markets where its products and services are well known; as such a move would go a long way in ensuring that the organization accomplishes some of its set objectives. Marketing professionals have overtime argued that the culture of a given nation often affects consumer behavior, as most of them often opt for local goods and services, which they easily identify with and understand its logistics and functionalities (Czinkota et al 2013, pg. 165). That notwithstanding, it is important to note that the Qatari population have overtime embraced Harvey Nichols products and services. A move that has played a role in the organization identifying Qatar as a potential market; consequently, Harvey Nichols should consider operating in areas where its products and services are fully embraced, as such a move will come in handy in ensuring that the firm grows into a global brand. Technological: Market analysts predict that the introduction of online commerce, which makes it easier for consumers to receive the products and services they desire whenever and wherever they perceive fit, has affected retail business. Harvey Nichols should consequently consider providing their clientele with the ultimate shopping experience, for the approach is likely to make sure that the customers visit the stores personally (Czinkota at al 2013, pg. 469). Legal: The legal policies enacted by various governments have no doubt made both local and international trade a somewhat complex affair predominantly because of labor laws, which regulate wage limits (Czinkota at al 2013, pg. 186). At the same time, the fact that customers presently have their say and can sue organizations that fail to meet their expectations has further made trade intricate. Nonetheless, it is far reaching for Harvey Nichols to ensure that it adheres to all the legislations of the markets within which they operate. This is particularly because such an approach would ensure that they remain in good books with the clientele and hence widen its customer base. Additionally, such a tactic would avert probable legal cases that the organization may face in the future. 2.2 Micro Environment: SWOT Analysis SWOT analysis is an important practice in any business venture given that it enables managers and administrators to come up with ideal strategies of remaining relevant in the competitive and challenging business environment. Strengths: It is important to note that Harvey Nichols has performed exemplarily well over the last five years amidst the prevailing tough economic times. This hypothesis is corroborated by the record profits it set in the year 2012. This cash flow is particularly important in that it enables the organization compete amicably with the dominant players in the market. Weaknesses: As highlighted in the section above, Harvey Nichols enjoys a substantial percentage of the U.K market. This is essentially because most of its retail stores function within the U.K. Nonetheless, the organization has undoubtedly lagged behind when it comes to international ventures, as the 80,000 sq. ft. store it intends to open in Doha is set to be the ninth foreign store, a figure that is extremely low compared to other players within the market. Another major concern that the organization has been forced to battle in the recent past is the need to manufacture products that do not cause any harm to the environment, particularly because of its usage of fur as a raw material for some of its products. Opportunities: With the rise in number of high-income earners, middle-class, and a segment of youths who are willing and ready to spend, Harvey Nichols has a substantial quantity of potential clients. Moreover, the organization should consider tapping into other markets that it has not yet explored. Threats: Given that several governments are enacting policies that are making their markets more penetrable, Harvey Nichols is no doubt facing stiff competition from other players within the sector such as Harrods, Marks & Spencer, John Lewis and Selfridges. In like manner, several startups are emerging within the market, and as such there is need for Harvey Nichols to adjust accordingly. 3.0 Summary of Key Issues For Harvey Nichols to have a significant impact in the international market, the firm should primarily consider operating outside U.K, because most of its competitors offer shopping experience across several nations (Tungate 2012, pg. 52-57). For the organization to expand its client base, it needs to solve the concern of animal rights activists who claim that the organization is ruthless towards animals, particularly during fur extraction. Culture plays an integral role in consumer behavior; consequently, the organization should come up with mechanisms that ensure that the inhabitants of the nations they have identified as potential markets embrace its products and services. At the same time, Harvey Nichols should ensure that it carries out appropriate market research, for that ascertains that it satisfies the needs of the inhabitants of the international market and that it effectively competes with other players within the market. 4.0 Strategic Options and Recommendations Going through the performance of Harvey Nichols and the manner in which the firm has been expanding over the years, it is apparent that the organization has in the past employed a watchful approach when carrying out expansion. The cautious strategy is attributed to the fact that the firm customarily carries out market research and settles on markets whose citizens embrace their products. For Harvey Nichols to have competitive advantage over other industry players, it should consider collaborating with like-minded organizations such as in the Doha situation, where the firm is set to open a retail store with the input of the Qatari Business Group. Similarly, the firm can venture into the international market by forming associations with key stakeholders within the prospective market. Other practices such as franchising, licensing and bringing on board local distributors can similarly play a significant role in the organization’s attempt to explore the global market and earn a good market position. 5.0 Strategic Recommendations for Market Entry Given that different markets have different demands, it is important for organizations globally to carry out both macro and micro environmental analysis before settling on a prospective market. For Harvey Nichols to make the best out of its international ventures, the organization should prefer politically stable markets such as Ireland, Sweden, and the Netherlands among others. This is essentially because such markets guarantee investor security. Similarly, the firm should open its doors in markets where the rate of inflation is under control, and the fiscal policies are favorable, such as Switzerland, Denmark, and Iceland as well as the Middle East nations (Marreirors et al 2012, pg. 270). The huge success Harvey Nichols has enjoyed within the U.K is partly attributed to customer confidence. Consequently, the organization should ensure that it settles on markets that embrace their products and services. Such an approach would ensure that Harvey Nichols competes effectively with most of the local brands. Over and above, the organization should aim at providing its large clientele with the ideal shopping experience and respect the legislations, which govern the international market. 7.0 Marketing Mix . Given that salespersons have overtime suggested that marketing refers to the aspect of putting the exact merchandise in the correct place, at the correct price and at the precise time, it is far-reaching for the organization to take note of the following concerns. 7.1 Product The essential products and services that a client demands, and the needs they are likely to satisfy. 7.2 Place The retail stores where customers normally visit in search of the products and services they offer. 7.3 Price The precise value of their product or service, and whether established price points exist for the product. 7.4 Promotion The mechanisms through which the target market can be made aware of the products and services of Harvey Nichols. 8.0 Summary As mentioned in the introduction, there is need to carry out international trade, as it opens up unexploited markets, and makes it easier for organizations to accomplish their business objectives. In as much as several entities have failed in their global ventures, a considerable percentage has been able to develop into global brands. Given that, Harvey Nichols has not yet exploited the international market there is need for the firm to carry out both internal and external environmental analysis before spreading its operations to additional countries. Such a move would not only aid the firm in doubling its earnings, but will enable it have a competitive advantage over its competitors. 9.0 References Czinkota, M. R., & Ronkainen, I. A. (2013). International marketing. Mason, OH: South-Western Cengage Learning. Harvey Nichols - Designer Fashion, Beauty, Food & Wine. Accessible at: http://www.harveynichols.com/sitemap/ International Marketing Theory Conference, Jain, S. C., & Griffith, D. A. (2011). Handbook of research in international marketing. Cheltenham, UK: Edward Elgar. Kleindl, B. (2007). International marketing. Mason, Ohio: Thomson Higher Education. Marreiros, S., & Tacke, H. (2012). Shop design. Kempen: teNeues. Tungate, M. (2012). Fashion brands: Branding style from Armani to Zara. London: Kogan Page Ltd 10.0 Appendices Appendix A: Courtesy of National Statistics Appendix B: Courtesy of Oxford Institute of Retail Management Appendix C Read More