International Marketing Strategy of Harvey Nichols - Case Study Example

International Marketing Strategy of Harvey Nichols Table of Contents Table of Contents 2 Introduction 3 Situational Analysis 3 Macro Analysis 3 MicroAnalysis 5 SWOT analysis of Harvey Nichols 6 Major challenges as per the situational analysis 6 Strategic options for international growth and recommendation 7 Ansoff’s Matrix 7 Porters’ generic strategies 8 Hofstedes cultural dimensions 9 Market entry strategy 9 Joint Venture 9 Foreign direct investment 10 Key aspects of marketing mix 10 Conclusion 11 Appendices 12 Reference List 13 Introduction The report is based on designing the international marketing strategy of Harvey Nichols for its business expansion. The organisation is one of the luxury fashion retail chain of the UK. They also operate high-end food markets, restaurants, cafes and bars. Their chains of stores are mainly well-known for fashion wears and accessories for men and women, beauty products and premium wine and food products. Harvey Nichols has started their business venture on 1831. During that period of time they possess only one linen shop in Knightsbridge, London. Over the period of time, this organisation has extended its business within different parts of the international market. They possess seven well-established overseas stores out of which two is situated in Turkey and two is positioned in Hong Kong. The other three is established in Kuwait, Dubai and Riyadh respectively. The organisation is also opening its eighth international store in Doha, Qatar by 2017 (Marketline, 2015). The further discussion will evaluate the strategic options for expanding the business within the new market of Singapore. The study will also evaluate different marketing mix to successfully establish their ninth store. Situational Analysis The situational analysis of the organisation is beneficial to critically evaluate the internal as well as external business environment of the organisation. It will include the analysis of macro and micro environment of organisation. The macro environmental analysis mainly focuses on the effect of different external factors such as political, economical, social and technological factors on the business expansion plan (Wilson and Gilligan, 2012). On the other hand, the micro analysis illustrates the impact of competitors, suppliers, substitutes and consumers on the business development of the organisation. The situational analysis also includes the evaluation of strength and weaknesses as well as opportunities and threats of the market (Wilson and Gilligan, 2012). Macro Analysis Political: Singapore is a democratic country with very high respectability towards foreign trade. The fashion retail market of Singapore demonstrates very low political risks due to its stable political atmosphere (Hill and Lian, 2013). The Ministry of Trade and Industry (MTI) of Singapore is focused on promoting economic growth of the country by creating job opportunities and developing lifestyle of the local population (Ko and Megehee, 2012). The governmental bodies of Singapore are actively involved in various economic activities of organisations doing business within the country. They welcome various foreign investments to enhance the business growth rate (Hill and Lian, 2013). Economical: The Singapore market possesses free-market economy which is developing in a fast pace (Hill and Lian, 2013). During the last five years, the economy of Singapore has demonstrated rapid increase in per capita income. It has secured the highest position among the Association of Southeast Asian Nations (ASEAN) (Appendix 1). This situation has improved the living standard and purchasing power of the population within the country. The spending capacity of consumer has also significantly increased within the last four years (Appendix 2). Social: According to the recent statistic, almost 74% of the population is using different social media and networking facility that increases the global communication and awareness regarding global brand (Jakartaglobe, 2011). Though the population is getting more inclined towards the premium products and luxurious lifestyle due to the increase in the disposable income, they provide adequate importance towards their social norms (Government of Singapore, 2015). Technological: Technological advancements play an important role in terms of the business developments in Singapore. The rapid connectivity and frequency of communication have developed a number of business segments in the country. The technological advancement has also lowered down the time frame and cost to conduct any business. The development of social networking has assisted the residents to easily connect with rest of the world. The IT infrastructure of Singapore has witnessed a huge development within the last few years. Micro Analysis (Source: Hill and Lian, 2013; Harvey Nichols Group Ltd. 2014) SWOT analysis of Harvey Nichols (Source: Hill, M. and Lian, K. F., 2013; Marketline, 2015) Major challenges as per the situational analysis The situational analysis of Harvey Nichols has demonstrated various challenges regarding business expansion in the Singapore market. High intensity of market competition by different foreign brand may restrict their market expansion venture. Absence of competitive pricing policy is one of the major challenges for the organisation. This situation may divert potential competitors’ towards other brands. Lack of advertisement and promotional activities may hinder the rate of market penetration of the organisation. Lack of knowledge regarding the cultural differences may reduce the capability of the organisation to offer customer specific products. Standardisation of clothing and food product ranges may distract consumers with the demand of customized products. Acquisition of different retail businesses within Singapore may also incur huge expense for the organisation. Strategic options for international growth and recommendation The major international strategic options for the organisation requires the analysis of Ansoff’s Matrix, Porters’ generic strategies and Hofstedes cultural dimensions strategy. Ansoff’s Matrix The analysis of Ansoff’s matrix provides different suitable strategies for the international growth of the organisation. According to the analysis of this matrix, the organisation may focus on the market development and diversification strategies to evaluate the potential market of Singapore (Hussain, et al., 2014). Market development: Market development will allow the organisation to penetrate new market with their existing product line (Hussain, et al., 2014). The management need to introduce their existing product line to the different consumer segment of the Singapore market. The management need to segment the market according to the lifestyle and income pattern. Therefore, they need to push their existing product line according to the market segmentations. This process requires proper advertisement and promotional procedure to improve the awareness of consumers regarding the product and services of the organisation. Diversification: The growth of organisation in new geographical market is hugely dependent on the product and services diversification strategy. It is the most risky strategy as it provokes the management to duly focus on the product as well as market development (Hollensen, 2015). The management need to analyse the available substitute in the market and their market demand. Therefore, they need to design new product line as per the requirement and demands of the Singapore market. For instance, the organisation can extend their product offering to kids clothing and accessories. Ansoff’s Matrix (Source: Hussain et al., 2014) Porters’ generic strategies The Porter’s generic strategies for market expansion suggest two essential growth strategies for the organisation such as the focus strategy and differentiation strategy (Manteghi and Zohrabi, 2011). Focus strategy: The focus strategy will encourage the organisation to create a niche market for their products and services. The management of Harvey Nichols is focused on offering luxurious experiences to premium customers through innovative product ranges (Manteghi and Zohrabi, 2011). Therefore, the organisation needs to target the upper class and upper middle class society of Singapore with high lifestyle to promote their products. It will enable the organisation to generate brand loyalty among the potential consumer. Differentiation strategy: Creating brand loyalty also needs to undertake the differentiation strategy. This strategy will encourage the management to focus on innovate unique product and service line for the targeted market (Manteghi and Zohrabi, 2011). For example, the organisation can introduce online customize clothing stores for the high-end consumers of Singapore. This customized e-store will allow the consumers to mix and match different options of clothing and accessories as per their preference and requirement. Porter’s generic model (Source: Manteghi and Zohrabi, 2011). Hofstedes cultural dimensions The cultural dimension theory of Hofstede provides a cross-cultural communication framework to the management of organisation. The analysis of this framework assists management to understand the effects of culture of different societies on the values and behaviour of its members (Cronjé, 2011). This analysis also enables the management to understand the decision making capacity and changes of product preferences within different society. The theory provides five different dimension of society such as power distance, individualism, uncertainly avoidance, masculinity and long-term orientation (Cronjé, 2011). As per the analysis of the theory, the culture of Singapore generally demonstrate tendency of low uncertainty avoidance. In this kind of cultural society, people are highly receptive towards unpredictable society. This social approach will allow the management to introduce new and innovative products and services. It will ensure rapid adaptability of population towards new business ventures (Hill and Lian, 2013). Market entry strategy Joint Venture The organization need to follow the joint venture strategy to enter into new market segments of Singapore. This entry strategy will allow the organisation to maintain their expenses while expanding their business venture within the different market segments of Singapore (Killing, 2012). This market entry strategy possess five common objectives such as- Ease of new market entry. Proper sharing of risks and rewards. Proper understanding and abidance of the local governmental regulations. Sharing of technological advancements. Lower expense due to joint product development (Killing, 2012). The organisation needs to select a smaller fashion apparel retail organisation to expand their luxury clothing business facility within Singapore. The chosen organisation should possess good market reputation and strong database of consumer. The joint venture will provide Harvey Nichols the access to the different market segments and distribution channel of the local organisation of Singapore. Therefore, it will reduce the time and expenses regarding the market segmentation and research procedure for the organisation. This strategic movement will also assist the management to better understand the society and culture of the local consumers. This process will assist the organisation to share different technological advancement of the other company to communicate with their potential consumers. The financial abundance of Harvey Nichols will allow the management to share the rewards with the fellow organisation. Foreign direct investment The organisation needs to undertake the foreign direct investment strategy to establish their food and wine business within the Singapore market. It will entitle them the direct ownership to the facility (Aharoni, 2011). Therefore, it will enable the management to offer unique food products and services to their consumers. They can concentrate on the acquisition of new entity to setup their business in the new market. This process involves the transfer of resources such as capital, personnel and technologies to the new market location. This process will provide high degree of control to the organisational operations. Therefore, it will increase the efficiency of organisation regarding product differentiation (Aharoni, 2011). Key aspects of marketing mix The organisation needs to design their products, pricing policy, promotional methods and placement procedure as per the preferences of their targeted consumer segmentation. Product: The population of Singapore is highly fashion conscious and they are very brand conscious. They are more inclined towards the purchasing of luxury fashions. Therefore, the organisation needs to modify their cloth materials and accessories as per the preferences of the consumers within Singapore. The female population mainly prefer exotic prints and bold colours, while the masculine population is inclined towards the dark colours. Hence, the clothing needs to be designed as per the differences in the preferences. Almost 74% of the population of Singapore prefers Chinese foods and another 14% population prefer Malaysian food. The restaurant chains of the organisation should focus on the ethnic dishes of these cuisines as well as fusion food products. Price: The pricing policy need to be modified as per the earning capacity of the population. The organisation needs to offer premium pricing for their luxurious and exotic clothing and accessories range. Alternatively, they must introduce competitive pricing for their formal and kid clothing sections. The food section should imply market-oriented pricing. This pricing process will focus on market research of the pricing policies of similar product line. Therefore, it will provide competitive advantage to the organisation. Promotion: Promotional procedure is essential element for the international market expansion to increase the awareness of consumers. The organisation needs to concentrate on digital advertising procedure for their clothing and accessories stores. Development in technological facilities in Singapore will assist the management of the organisation to serve a wide range of consumers. They also need to allocate a good amount for the television and newspaper advertising. Utilizing highway hoarding and billboards can also be proven as a good option for the organisation. The organisation should concentrate on providing discounts and scheme as per the festive seasons of Singapore. The organisation also required to focus on developing E-commerce facility to attract the tech savvy and busy professionals. This process will also enable them to reduce the product switch tendency of consumers by eliminating the discomfort regarding product search. Placement: They need to follow selective distribution to maintain their product quality. This procedure will also assist them to increase their brand value. Selective process of distribution will assist the organisation to utilise limited number of retail stores within the Singapore market. This process will also enable the management to monitor performance of each product. Therefore, it will allow them to indulge in required modification. Conclusion The report has evaluated the international marketing strategies of Harvey Nichols regarding their new market venture to open ninth international store in Singapore. The study has elaborated the analysis of internal and external factors of the business environment. This analysis has elaborated the possible challenges of the business expansion plan in different segments of the market. This analysis has evaluated a number of challenges for the organisation within the Singapore market such as pricing policies, lack of cultural knowledge, lack of consumer awareness and insufficient advertisement and promotion process. Therefore, the discussion has evaluated and recommended different international market growth strategies which include market development, diversification, differentiation and focus strategy. These strategies will enable the organisation to track different segments of the Singapore market. The strategies will also allow the organisation to attract high consumer traffic. According to the analysis, the organisation needs to follow the joint venture market entry strategy for apparel retail and foreign direct investment strategy for their restaurant business. Finally, the report has described different elements of marketing mix as per the consumer and market segments of Singapore. Appendices Appendix 1: GDP Per Capita of Singapore (Source: Trading Economics, 2015) Appendix 2: Consumer spending in singapore (Source: Trading Economics, 2015) Reference List Aharoni, Y., 2011. Behavioral elements in foreign direct investment decisions. The future of foreign direct investment and the multinational enterprise. United Kingdom: Emerald. Cronjé, J. C., 2011. Using Hofstede’s cultural dimensions to interpret cross-cultural blended teaching and learning. Computers & Education, 56(3), pp. 596-603. Government of Singapore, 2015. Statistics Singapore: Latest Data. [Online] Available at [Accessed 27 April 2015]. Harvey Nichols Group Ltd. 2014. Harvey Nichols Corporate. [pdf] Harvey Nichols Group Ltd [Accessed 13 April 2015]. Hill, M. and Lian, K. F., 2013. Politics of nation building and citizenship in Singapore (Vol. 10). London: Routledge. Hollensen, S., 2015. Marketing management: A relationship approach. London: Pearson Education. Hussain, S., Khattak, J., Rizwan, A. and Latif, M. A., 2014. Interactive Effects Of Ansoff Growth Strategies And Market Environment On Firm’s Growth. British Journal of Business and Management Research, 1(2), pp. 68-78. Jakartaglobe, 2011. Singapore Has the Highest Rate of Internet Usage in Southeast Asia. [online] Available at [Accessed 27 April 2015]. Killing, P., 2012. Strategies for Joint Venture Success (RLE International Business) (Vol. 22). London: Routledge. Ko, E. and Megehee, C. M., 2012. Fashion marketing of luxury brands: Recent research issues and contributions. Journal of Business Research, 65(10), pp. 1395-1398. Manteghi, N. and Zohrabi, A., 2011. A proposed comprehensive framework for formulating strategy: a Hybrid of balanced scorecard, SWOT analysis, porter‘s generic strategies and Fuzzy quality function deployment. Procedia-Social and Behavioral Sciences, 15, pp. 2068-2073. Marketline, 2015. Harvey Nichols Group Ltd.: company overview. [pdf] Marketline. Available at [Accessed 13 April 2015]. Trading Economics, 2015. Singapore GDP per capita. [online] Available at [Accessed 27 April 2015]. Wilson, R. M. and Gilligan, C., 2012. Strategic marketing management. London: Routledge. Read More