Let us discuss with the practical examples of global retail.
We will consider some US/Canadian based Fashion store chain interested
in launching their first store abroad. After going through the market studies
and demand, they found China/India/Egypt and South Africa have the potential
buyers for their products. They decide to penetrate in India, Since Indian population is English speaking and trust on North American quality.
Their international market penetration strategies will be:
- Political stability of India (Central govt. system,
past political structure)
- Security of region (Riots, Domestic non acceptance of
products, Terrorist activities, Climatic conditions)
- Foreign policy for international trade (Non
expatriation of funds, % of foreign joint venture, nationalization of
trade, exchange policy, currency exchange rate )
- Social, economical, geographical structure (Literacy
rate, income levels, family status, family density, Logistic and road transportation
system, telecommunication, internet services)
- Family, Religion, traditions and culture (Festivals, dressing
sense, fashion, interests, hobbies)
- Investment and finance (Nevertheless India is more expensive than US and Canada, project cost is pretty much higher) though banks,
financial institution are little supportive.
Based on thorough study and investigation of above-mentioned
aspects, deciding the below factors are very important to start up the project.
- Product price (Same as parent stores, higher or lower
price)
- Location of retail store(Independent building, Malls,
Strip Malls, Hybrid markets South ext., GK- 1M)
- Target population(Income level, Status)
- Competitors (Lacoste, UCB, Levis, Next, Tommy)
- Size of the store (regular size 100sft, vast sprawling
halls like Sears, Target, Lifestyle)
- Merchandise strategies (specialize merchandise, section
system)
- Visual merchandising (Displays, Mannequin settings,
Wall colors, Store layout, logo display)
- Promotional activities (TV commercials, News Paper,
Pham plats, Fashion Magazines, Road sign hoardings, Commercials on Public
transportation and Bus stops)
- Buying Decisions (Manufacturing in India, China -Cost Benefit Analysis)
- HR Issues (Mix management(North American/Indian) of
this whole venture, all other Store managers, associates, merchandisers,
buyers must be Indian to understand the language, traditions, festivals
and culture)
All of them are important aspects of Global retail strategies;
nevertheless buying decisions can have considerable impact on this complete
global project. In terms of manufactured clothing in India, it makes product
less expensive, gives employment to Indian labor and professionals. Ultimately,
benefits to Indian economy. This economic benefit leads to encouragement to
ventures by the Govt.
Since global retail project is ongoing exercise, successful
penetration makes the product globally competitive and reputed. One successful
penetration leads to opening up more stores and customer base.
This brand building and penetration exercise in own region
and international land takes many years. It takes gallons of bloodshed, tons of
pain to build up the brand and survive. Nevertheless, erecting towers and
buildings are only few months project. Building a pyramid takes several decades
to complete.
The
author is student of Post Graduate in International Business at George Brown
College, Canada
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