Harvey Nichols Store Analysis - Case Study Example

HARVEY NICHOLS STORE: INTERNATIONAL MARKETING REPORT By submission Contents Harvey Nichols Store Case Analysis Introduction Harvey Nichols is a designer retail outlet based in the UK. An upscale store franchise specifically deals with high-end luxury clothing lines from well-known designers. Harvey Nichols brand offers the ultimate fashion experience. Limited, alcove and well-known labels sit beside available everyday collection brands, giving the clients personalised services and selections for all their clothing needs – from day by day to amazing (Harvey Nichols.com 2015. Harvey Nichols main products include ready to wear designer brands, from executive clothing to casual and contemporary attire and accessories for men, women and children. The company features a wide range of selection from popular brands such as Neil Barret, Stella McCartney, Alexander Wang and many other popular brands. Other products marketed and carried by the company include beauty products and accessories, selected wines and spirits and gift hampers. In line with the company’s expansion strategies, Harvey Nichols seeks to expand to a new market that has potential to sell luxury high-end goods. Considering that Harvey Nichols does not have a presence in the Scandinavian countries, this market analysis will show the viability of opening up the company’s ninth store in Finland. Finland is regarded as a high income earning country based on per capita figures. It is rated amongst the top world high-end markets for luxury brands because of its financial and entrepreneurial achievements. At an average age of 35, Finland’s professionals are extremely wealthy, with average household annual earnings of approximately £168,500 and a median home value of £512,000 (Consumer Price indices 2013). Approximately 65% of the population in Finland has achieved a bachelor’s degree and approximately 55% of these certified citizens have acquired a master’s degree. Harvey Nichols intends to enter the Finnish market through a contractual agreement with a local firm. A contractual agreement with a local firm will guarantee long-term operations in the new market. By identifying a local trader with a recognized brand name, Harvey Nichols will have an advantage in sharing of technology with the host company. This method will minimize operational risks associated with new entrants into unventured markets, and will assist in accessing the local markets within Finland. Situational Analysis Harvey Nichols Company has been in the fashion collection business long enough to understand the dynamics of different fashion international markets as well as specific customer needs. The level of quality determines profitability especially for high-end markets such as the newly proposed Finland market. The basic market requirement is the provision of high-end luxury products for consumers in Finland. Company Analysis Nichol Harvey store is a high-end luxury retail outlet that intends to open a new store in Finland. The company carries multiple popular brands for both men and women. The majority of these brands are designer brands, which form the backbone of the company’s operation. The company clothing selection and unique personal style will ensure that customers are at all times well dressed. Organizations Assets and Skills The company is renowned for top-notch quality service rendered to its customers. The quality branch additionally extends to the products offered by the company. Harvey Nichols offers personalized service to its customers. The company is also able to hire the best human resources from what the Finnish market has to offer. The company has a huge capital base enough to support immediate investments into the new market. Market Analysis Business Environment Analysis In the year 2011, Finland was officially awarded triple a long-term credit rating for superb sustained scoring in regards to internal stability. The internal stability of a country is dependent of a multiple of intertwined interrelated factors such as good governance, and adherence to the rule of law. Additionally, Finland population is highly educated. Most individuals possess vital skills, making Finland to have one of the most skilful workforces. The country’s education system has always ranked first in the Programs for International Students Assessment (PISA 2012). The geographical location of Finland gives a good opportunity to tap and expand the company’s operations to Northern Europe, estimated to have approximately 20 million of luxury consumer brands. Political Environment Finnish Government is highly protective of private investments. The government and local authorities are extremely friendly and supportive towards businesses, usually minimizing the bureaucratic processes that weigh down on a foreigner’s commitment to invest in a new market. The government also encourages investments by providing governmental incentives, such as joint funding of research processes carried out by Finnish Universities. Technological Environment Finland is technologically advanced, with most institutions using current technology for majority of its operation. Technological advancements are also evident in the hugely invested internet and WIFI hotspots connection points for the internet. The country also operates on a cashless method of doing business, with Point of sales centres present in the majority of shopping locations. This creates efficiency in the running of the businesses. Social and Cultural Environment The country scores highly in corruption ratings, usually regarded as one of the least corrupt countries in the world. Finns are also law-abiding citizens, with only a handful of violent crime cases reported every year. There if a conducive environment in Finland for doing business Physical and Infrastructural Environment Finland and Russia enjoy railway services jointly, as the two countries share a railway gauge. Therefore, this makes Finland a good entry point into the Russian market. The good network of roads in the country also makes it viable for investments into the luxury market. Nature of Demand Finland’s luxury market is fast growing, with individuals seeking to purchase high-end luxury apparels. Young high-earning individuals are increasing by the day, as the labour market becomes increasingly fragmented, with individuals seeking constantly in competition for the best employment opportunities. Therefore, given that they fall at the company’s age target market, the demand for high-end luxury goods is increasing by the day. Competitive Structure of the Industry The Luxury industry in Finland has multiple market players because of the high. The clothing industry in Finland produces good quality clothing for local and foreign consumers. There are both small and multinational corporations engaged in the clothing industry. Among these companies is a large group of family owned businesses that employ locals for their business activities. Because a large number of business establishments are family owned, they are unable to provide the necessary capacity to carry big European and American designer brand names. Because of the weather nature of the region, most high-end brands consist of camping accessories and heavy snow wear. Others are focused on leather products. By entering the Finland market, Harvey Nichols will be providing a much-needed alternative to local wear for the affluent group of shoppers. Finnish are very in tandem with clothing design. However, the local business outlets are accused of failing to carry diverse wear that breaks from the traditions. Harvey Nichols offers the much-needed alternative. Competitor Analysis Harvey Nichols will experience stiff competition from numerous Finnish clothing carrying similar products. Within Finland, these companies are not very many. Direct competitors comprise of Anna Ruohonen, Sari Rennison, IVANAHelsinki and Helsinki 10. These companies carry some highly similar products from other renowned designers from around the world. Indirect competitors include Galleria Esplanad, lindex, Gliter and Prisma. SWOT Analysis (See Appendix 1) Internal Company Strengths and Weaknesses The company is famed for housing the best brands that fashion houses have to offer. Harvey Nichols carries major brands such as Maison Kitsune and Alex Wang. The popularity of these brands propels market sales in large quantities. The uniqueness of some of the other brands carried by the company, such as its wine selections is that they are not mass-produced and therefore found in limited editions. The company has a very reputable customer service. This explains the reasons for its successes in other previous markets, most of the clientele returning to make repeated purchases. This is attributed to its high-class customer service. Harvey Nichols however, is not popular among the Northern European nations. Lack of popularity may see a slow start to the company’s operations in Finland. The company also experiences a lag especially in trying to establish shopping trends for new customers. The company will also experience stiff competition from the already well-established similar shopping clothing stores. External Market Opportunities and Threats Harvey Nichols intends to venture into a market that is full of potential. Finland’s luxury clothing market is not exploited enough. There are not many similar stores and therefore if the company were to adopt the right marketing strategies, Finland would become a major selling point. The government is also supportive of private business establishments. In addition, physical structures in Finland such as the rail and road will facilitate opening into the Russian market. The main threat to the company’s operations in Finland will be the fact that fashion is a constantly changing industry. So much happens within a very short time, and the remoteness of the Finnish market will prove a challenge. Objectives The following are the international and marketing objectives of Harvey Nichols limited. International Objectives The company international objectives are to maximize on sales to increase inventories three times and generate £ 13,500 in sales per square metre. The company aims at attaining and maintaining a 25% profit margin through close attention to the cost of the merchandise and efficient use of the company resources. Harvey Nichols aims at building company sales through advertising and marketing through Finland’s local media Marketing Objectives Establish a strong client base in Finland specifically Helsinki, its capital city Create a trend of repeated shopping through strong customer service Create fashion awareness by introducing trendy luxury merchandise Recommended Market Strategy A number of initiatives inspire the company’s marketing strategy. Advertisements will play a key role in the Finland’s local media and advertising tabloids. The company will also engage commercial marketers to append the brands logo on the major internet search engines as a secondary way of advertising and marketing the company. For specific designer items such as the Paco Rabane fragrance, individuals refer to the commercial directories to locate retail outlets. The company will also erect giant billboards along the major super highways and railroad is especially the one connecting Finland to Russia. Target Market Identification and segmentation Strategy The main Harvey Nichol’s client base is comprised of professionals earning a basic of more than £105,000 annual salary. Other customers include luxury shoppers, business owners, celebrities, media personalities and wealthy Finns with a sense of style. The target market for Harvey Nichols products has the following characteristics. The Primary Client The main Harvey Nichol’s client base is comprised of professionals earning a basic of more than £105,000 annual salary. Other customers include luxury shoppers, business owners, celebrities, media personalities and wealthy Finnish men and Women with a sense of style. Psychographics Seasonal fashion individuals willing to purchase quality merchandise and brands Individuals interested in understanding the right style for them Individuals interested in an overall better look and career individuals seeking to make good impressions at their place of work Demographics Professional men and women between the ages 25-55 years Household income over £105, 000 annually College-educated and understands fashion trends Lives in a higher-income neighbourhood in Finland and mainly Helsinki Market Positioning The company’s retail outlet will give the definitive style experience. The company offers distinctive market niche and well-established brands and labels in addition to offering wardrobe solutions to their customers’ needs. The company also offers personalized services, their main advantage being the unique collection from renowned brands across the world. Market Entry Strategy Harvey Nichols intends to enter the Finnish market through a contractual agreement with a local firm. A contractual agreement with a local firm will guarantee long-term operations in the new market. By identifying a local trader with a recognized brand name, Harvey Nichols will have an advantage in sharing of technology with the host company. This method will minimize operational risks associated with new entrants into underutilised markets, and will assist in accessing the local markets within Finland. A contractual agreement with an equally well renowned brand will allow Harvey Nichols the necessary freedom to establish its preferred line of business and strategies. This method will guarantee speedy processing of documentation. Marketing Mix Strategies and Tactics Product Harvey Nichols will deal in a variety of luxury merchandise. These merchandise include Men’s designer lifestyle merchandise such as Bang & Olufsen Play’s high-spectrum headphones, large fragrance designer brands such as Hugo Boss’ luxury gift sets C-OF-MAN jeans label, Hugo Boss Orange polo shirts and T-shirts. Women’s designer lifestyle goods such as Victoria Beckham printed silk Shantung dresses, Marson Margiela caramel leather boots, Charlotte Simone Popsicle scurf’s and other brands. Skincare products, Beauty products such as make up, fragrances and selected wines and alcoholic drinks for clientele in their roof top restaurant clients. Place The company intends to set up shop in the busy Helsinki capital of Finland. The store will provide a one-stop-shop shopping experience, where everything will be located under one roof. Pricing Harvey Nichols pricing model will be based on attaining a particular margin for every product. Promotion The following promotional strategies for initiating euphoria and knowledge about Harvey Nichols will be applied. Local and international PR Harvey Nichols Website Promotional materials Peculiar visual aids and displays such as bill board advertising Word of mouth and referrals Local and international advertising mediums. Marketing Research Harvey intends to engage in an additional process of marketing research, which will act as a feedback system, founded on a card suggestion system. The customer feedback system has several questions and statements that clients are requested to give their ratings in terms of a particular scale. Several other open-ended queries are presented to the client to give constructive feedback. Harvey intends on implementing constructive suggestions to satisfy the customer demands. Conclusion Harvey Nichols brand is a successful franchise both internally and internationally. The company offers unique services and differentiated products that make it difficult for other companies to emulate. Additionally, Harvey Nichols brand has a good reputation for offering good quality products, and top of the brass customer service delivery. Given the uniqueness of the company’s brand, Finland will enjoy the different services and fashion brands offered by the company. Finland is a perfect location because the market is unexploited. The country runs on a perfect set of infrastructural development that makes trade easier and efficient (Dubois & Duquesne 1993). Finland is also one of the high earning countries in the world as per the household annual income. Finland is also strategically placed to further market the Harvey Nichols brand into Eastern and Northern Europe. Appendices Appendix 1 The SWOT analysis gives an evaluation of the company’s internal strengths and weaknesses while also reviewing the markets opportunities and threats. Strengths Harvey Nichols has an International Image Multiple designer brands Top quality clothing from all over the world Unique designs and strong business ties with brands producers Weaknesses Difficulty in establishing consumer trends High than normal prices may discourage local non-affluent shoppers Developing operations from the first brick may prove a challenging task Opportunities Market potential yet to be fulfilled Few similar stores within Finland Governments encouragement of foreign businesses will make it easy to enter market Road and rail network to open up new Russian market Threats Fashion constantly changing Finland quite far from major fashion cities Reference list Cahen, A. (1949). Measuring the Merchandise Flow of Mens Clothing. Journal Of Marketing, 14(1), 67. doi:10.2307/1247174 Consumer Price indices. (2011). Financ Stat, 593(1), 1-21. doi:10.1057/fs.2011.116 Dubois, B., & Duquesne, P. (1993). The Market for Luxury Goods: Income versus Culture. 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