Global Markets & Entry Strategies of Topshop - Coursework Example

 TOPSHOP BUSINESS Section I Topshop female clothing company is a fashion and trends outlet that majors and concentrates on women and their trends and cloths. It has been existent in the business and industry for a long time basing most of its operations and line of trade in shoes, beauty products and clothing items which trend and are liked by fashion conscious people. In light of the fact that the internet and the social media has grown, the Topshop Company has also ventured in wining online customers. This has been occasioned by the fact that the society has ventured into internet marketing and shopping where people place bids and orders for products and have them delivered to them in time. In principle, the company is positioned has a platform and avenue where it can market its products in their website and online magazines. It is important to note and mention that Topshop also focuses on marketing incentives and practices by giving waived fees and offers to on sales of some of the fashionable and trendy items that it has on its stock and stores. Intuitively, it is critical to note and mention that Topshop has a believable brand name that easily resonates with the market situation and the business spectrum. In the conventional sense and aspect, a brand is built by a business after several years of quality service delivery which the customers appreciate and value as such (Haugom, Throne, Myrseth & Løvoll, 2012). Secondly, it is a strength of the business to base its operation around unique product design in terms of fashion. All the cloths that are presented to the market for consumption pass through rigorous testing and validation process to ensure that they meet the proper standards and level of acceptability. Similarly, the store operates as a one stop store where different categories and types of products are sold there. Thus, a person who visits the store would be assured of quality and variety at affordable prices. This is the reason as to why the Topshop has continued to enjoy a near monopoly status in the domestic realms and markets. Thus, it would be relatively easy to penetrate to the international markets due to the strong domestic base. On the other hand, the only drawbacks is that the Topshop is an independent run store which have not merged with other stronger business in the industry. This makes it susceptible to be affected by major shocks and uncertainties of the economy. If for instance, there is a major economic disturbance such as rise in taxation to the raw materials used such as cotton, then the business would bear the brunt alone. This is to say that it does not enjoy economics of scale which implies that if there are any uncertainties in the international zones, the Topshop business would suffer irreparable economic damages and shocks (Gremme, 2014). The relatively smaller geographical area accounts for a less market share in the whole of Asia a geographical coverage which cannot be relied on to propel the business to higher international penetrations. There also variety of opportunities and avenues which are the disposal of Topshop in the pursuit of international penetration ad expansion. To begin with, there is the aspect and possibility of entering and penetrating the market at the right time by doing a research on the purchasing power of the customers. It is to imply that the business would be best placed to know the type of penetration to make and the right product placement procedures. It is my guided and reasoned opinion that by gauging the economic purchasing power of the customers allows the business to be reasonable in their pricing methods (Jackson, 2004). For instance, in a country such as Singapore which has a relatively higher economic performance and purchasing power could have a relatively higher price index as compared to India which has lesser purchasing power of the population? Thus, in the pursuit of internationalization it would be proper to gauge with utmost and accurate precision the level of price to charge in the different countries. Threats also come in handy in the name of other new market entrants given that this is a free competitive market. Thus, other business would threaten the customer base of Topshop especially if they enter the market with enticing incentives to attract the customers especially in the domestic market of United Kingdom (Begg, Pickles & Smith, 2003). It becomes worrying if the other new business entrants merge and forge a formidable threat against Topshop by reducing their prices or increasing their brand coverage of the domestic market. As a prospective analyst and business commentator, it is safe to mention and assert that other entrants pose a reasonable threat to the market share in the domestic markets with equally dire effects on the international front if the same logic is extrapolated. Tied to the above point of expansion relative to the potential threats, it is worth to note and mention that the business is set and well placed for international venture and expansion. This is justified by the fact that the line of business that Topshop stores would offer to the international markets are relevant. Trendy and fashionable clothes are consumables in each and every country in the world, thus, there would be no hustle or difficulty in placing the products in the international markets for consideration by the customers. Section II The attempts and endeavors for internationalization are geared towards the five countries with diverse and varies economic variables and societal dynamics. The countries have different amount and levels of population with China having the most and Singapore the least. Conventional wisdom and business fact or truth demands that high population presents a high number of customers. More people means that many customers in the business and thus more prospects of marking good business expansion. For instance, China has a population of 1369202232, and under rough estimation, a twenty percent market share or control would be a good venture for Topshop clothing company as a business (Mukoyama & Dawson, 2013). If the same argument and logic were to suffice and hold as legitimate then Singapore would be the least viable market venture and option. However, a blanket assumption cannot be passed to hold for all the countries since there are socio-demographics of the population that ought to be considered. Given the fact that Topshop mainly focuses on female wear and clothing, it becomes crucial to know the number of females in those countries so as to gauge whether or not such numbers would warrant an international expansion. It is important to note and mention that China has the highest number of female population implying that it would be a good move to expand in China. A high population in the simplest and most basic sense implies that there is availability of market in such a society (Goworek, 2011). Similarly, it becomes imperative to consider the population growth rates so as to calculate and prepare for long term project in terms of expansion. Singapore has the highest rate of population growth meaning that Topshop could install long term project there. In the long run, the expansion in Singapore would be most beneficial since in future, there is a higher chance of population increase which relates directly to higher market chances of penetration. In terms of demographic-Singapore highly entices for a long term venture while China would be reasonable for high volumes of sales in the short run due to high population. Social demographics is not the sole determinant and the ease of doing business in a specific country also plays a major role and part in the international expansion of a business. There are other macroeconomic determinants and requirements such as the tax levied, the legal requirements required to start business and the ease of doing business or the available conducive business environment. It is my respectful analysis that the presence of a market occasioned by population of viable buyers from the ages of 15-64 ought to be considered the most. In principle, Singapore has the highest population in terms of the prospective customers and that fact ought to override all the other legal requirements required to start a business (Ng, 2008). I settled on Singapore because the Topshop Company would make profits over the long term due to constant market availability over India for example which few legal requirements but lesser viable population. At the micro level screening, in terms of the government stability, attitudes towards foreign business in terms of exports or imports, and other conditions Singapore scores the highest. Section III-In Depth Market Analysis There are other competitors who may forge a threat Topshop in the name of Esprit and New Look, which cannot be termed as bigger opponents. In china, Meters bonwe and Yi shion are also competitors but they do not command a domineering market share over the others. The country entry conditions score 4.67% and 4.42% China, which propels and puts Singapore over China in terms of prefer ability in terms of entry and penetration (Lea, 2013). Section IV-Entry Strategy and market Plan The mode of entry for the market in China focuses on the exports as the mode of entry and penetration. The formal store as an entry point in China in accordance to pop-up store. The import strategy at London in Topshop would concentrate and base on the Southeast Asia. In retrospect, the Topshop is not accountable for the profit tax. This is to say and mention that the customs duties in the endeavor of purchasing goods. This is to say that the regime of taxation that the government levy and expose the countries vary depending on the ease of doing business for a country in an area. For instance, in Singapore, there is the notion and aspect of a fixed tax rate where the government levies and charges the foreign businesses and not on the basis of profits. For instance, other countries would such as India charge tax on the basis of the profit that a foreign venture would make. If the country charges a tax rate of some percentage such as two percent then such a tax rate would be unfair and inconsiderate. In order to cut a niche for the business such as a forecast for prospective future venture. Tentatively, breakeven analysis in this respect and line of thought refers to the situation where the total revenue for doing business equals to the total cost of doing such a business. In the attempts and endeavors to expand internationally, it would be critical to position the business relative to the strategy of entry (Fernie & Perry, 2011). As a prospective entrant and positive observer, I would position and front the fact that the Topshop Company would have better and higher sales in their future attempts. Comparatively, I would mention that Singapore with a good portion of viable population would push and ensure that the market is ensured for a long period of time. This is to say and ensure that the business would be allowed to grow and expand that the in other countries such as India and China. However, the business would enjoy the most returns in Singapore because the share of market that the population would have would remain relevant over a period of time. As a matter of fact and principle, the break-even analysis and considerations for Singapore are fair such that the operational cost is lesser than the revenue that the business would make in the long term. Section V There are free trade agreements and other preferential trade agreement is used to minimize and exempt or reduce the custom duty. This calls for a political and economic relationship or engagement where the governments must have forged political and bilateral trade agreement. On the political font, Britain has signed free trade agreements with reduced embargoes and custom duty agreements. This is to say that all goods and services from Singapore and Britain can enter or leave each one of the countries. Thus, all imports to Singapore from Britain would not be subjected to any punitive or restrictive taxes which may be costly to the business or Topshop as a business venture. In another aspect and notion, it would be difficult and improper for instance for Topshop business to import all the raw materials such as cotton and filler threads from the United Kingdom. However, in light of pursuit to expand in Singapore, Topshop would get a supplier from Malaysia or Thailand which is a member of ASEAN trade with Singapore. It is also important to note and mention that Malaysia as a country has a favorable economic imperative and disposition that would ensure that Topshop gets an easy penetration into Singaporean market. Secondly, Thailand has cotton shops and thread filler shops and bilateral trade agreement with the UK which also positions it as a prospective supplier of the materials to the Singaporean market (Bartman, 2014). The seven stages for the executive and management of the Topshop establishing an organisation ought to follow a chronological and step by step approach to the last stages of gauging the believability of the supplier or the procurement process accordingly. Due to the fact that the international venture would be centered in foreign soils and land. This is to say that the whole purchasing process would be focused and based on the purchasing process. Subsequently, it would be critical to identify the supplier of the raw materials such as cotton and the thread fillers. There are reputable suppliers of the raw materials who would be selected on merit based on the report and recommendation of the procurement committee (Daoud & Högfeldt, 2013). In retrospect, as a prospective analyst, I would advise and opine that a supplier who would give the cheapest price or cost would be the most appropriate. Secondly, the suppliers would be gauged on the basis of their credibility such as ability to produce and supply credible goods that would meet the standard of the consumers. In order to design and pursue a credible method of payment system, it would be imperative and thorough to use the free on board and the cost insurance and freight approaches in the two countries of interest. It is important to note and mention that there are fundamental differences in these two payment modes by the different countries. Basically, the cost insurance and freight applies when a goods are loaded on a ship then the full cost and liability of the goods shift from the seller to the buyer. In case of any eventuality, then the full risks and costs or liabilities would be borne by the buyers and not the seller. The free on board mode however stipulates that a seller must load the goods to the ship and follow them to the extent when they would be cleared at the port or base of the destination country. If there is any consideration or eventuality, then the seller would cover such costs and subsequent risks. Having said and covered that end of the technicalities, it would be reasonable fair if the Topshop as a business used the cost insurance and freight mode of payment while entering China. This is so because the business conditions and rules in China are not as favorable as the business conditions in Singapore or any of the prospective destinations for expansion. Thus, in order for the Topshop as a business to realize a more favorable and relaxed returns, it would be critical to use the cost insurance freight mode so as to reduce the operational costs and in turn save money (Aspers, 2008). As much as the mode of payment is relatively expensive, it would be more beneficial to use as compared to the free on board mode. In other countries such as Singapore, the company ought to use the free on board method which is relatively cheaper and also the business environment would allow Topshop to have some savings accordingly. Conclusion The above essay and exposition has discussed and focused on the technicalities and the operational in line of the pursuit of the Topshop in its desire to internationalize and expand its business cover. In principle, it has articulated and covered the internal and external aspects which may help the business to expand and reach the global markets with ease. It is important to note and mention that essay has also factored in or considered the threats that may hinder Topshop from attaining a relative easier rate and prospect of success. as much as there are several countries that Topshop could have pursued to expand to in Asia, Singapore stands out as one of the most viable investment and expansion destinations. This is so because the age of the population is favorable from fifteen to sixty four with a reasonable purchasing power by the population or the society. References Aspers, P. (2008). Labelling fashion markets. International Journal of Consumer Studies, 32(6), 633-638. Bartman, L. (2014). Doing business in Africa: guidelines for new entrants (Doctoral dissertation, Stellenbosch: Stellenbosch University). Begg, B., Pickles, J., & Smith, A. (2003). Cutting it: European integration, trade regimes, and the reconfiguration of East-Central European apparel production. Environment and Planning A, 35(12), 2191-2208. Daoud, D., & Högfeldt, V. (2013). Expanding into new markets: Is Lebanon a potential market for Swedish fast fashion companies? Fernie, J., & Perry, P. (2011). The international fashion retail supply chain. In Fallstudien zum Internationalen Management (pp. 271-290). Gabler Verlag. Gremme, M. (2014). Zara. Global Fashion at Lol Prices. Goworek, H. (2011). Social and environmental sustainability in the clothing industry: a case study of a fair trade retailer. Social Responsibility Journal, 7(1), 74-86. Haugom, M. K., Throne, S. R., Myrseth, S., & Løvoll, L. M. (2012). Moods of Norway: NY market entry. Jackson, T. (2004). A contemporary analysis of global luxury brands. International retail marketing, 155-169. Lea-Greenwood, G. (2013). Fashion marketing communications. John Wiley & Sons. Mukoyama, M., & Dawson, J. (2013). 3 Global portfolio strategy as a new strategic paradigm. Global Strategies in Retailing: Asian and European Experiences, 55. Ng, M. (2008). Building a global Asian fashion brand (Doctoral dissertation, Stern School of Business New York). Read More