In the recent decades globalisation had gained a lot of importance and the businesses across the globe had focused on explaining their businesses. With the on-going technological advancement and globalisation the firm had focused on internationalisation and tries to enter into the new markets for leading the firm towards success. Global business is the international trading market with many hazards and opportunities for risk avoidance and market value capture (Shageeva et. al. 2017). Business activities can only take place in an environment that is conducive to the company's success. This can happen when a corporation has a lot of expertise and knows how to read the macro and micro environment in order to ensure that the company is profitable. Complexity has to be understood by the company of macro environment and make an effective relationship with it so that there is going to be controlled management control and leaders to operate effectively. The company need to do effective market research before entering into a new market for doing trade.
In this research study the researcher would be discussing the different factors which are required to be taken in concern while entering into new market. For this the researcher would be considering an SME which is an UK based manufacturer. Hawthorn would be considered an case company for this study. Hawthorn is one of the leading clothing manufacturing firm of UK. The company is looking forward to expand their business operation for leading the firm towards success. This study will discuss regarding the internationalisation of Hawthorn in France. The researcher would explain that what factors are required to be considered by the case company while entering into the new market of France.
FOUR MULTIDIMENSIONAL FACTORS IMPORTANT FOR INTERNATIONALISATION
The business world is becoming and the companies are entering into new market for increasing their customer base and leading the firm towards success and development. The case company is also focusing on expanding their business into new market of France for attracting new customers and inclining the sales and profitability of the firm. Market analysis is very important for the firms when they are focusing on going global. Hawthorn is expanding their business in France market so that they would be able to have a better economic factor. They are expanding their product and services in France to analyse better outcomes from the services they offering. When an organisation is entering into the new market the both positive and negative outcomes can be received due to this reason market research is important (Altbach, 2017). It is dependent on how the company operates in the new market.
While entering into the new market the companies needs to focus on identifying that what would be the different opportunities and challenges that are expected to be faced by them. Different factors of the nation are having an major impact on the firms operating in the nation. Before entering into France market, Hawthorn needs to ensure that the market creates great opportunities for inclining the sales and profitability of the firm. Different factors related to the macro business environment are required to be considered. Recently the world is focusing to recover from the adverse effect of the pandemic situation. So it had become more significant for the firm to focus on evaluating all the factors related to its expansion into France. If all the factors are in favour then the company should focus on expanding their operations to France. Hawthorn needs to pay attention on effective market research and should try to develop the strategies accordingly then only they would be able to enter into the market and doing business properly (Lari et. al. 2021). The four most important multidimensional factors that are required to be considered by Hawthorn are being explained in detail.
Economic and Legal Factors
The economic factors are having an major role for all the businesses operating in an particular nation. The different factors related to the economic factors are required to be focused by the companies while entering into new markets or starting to work in new market. Hawthorn is focusing on entering into which is an stable economy and the country is focusing on addressing the different economic issues related to the unemployment, poverty rate, sluggish growth and lagging competitiveness. France is having the strongest economy in the world and ranks among the fifth largest economy of the world. This means that the country is having an great opportunity for the firms to expand in France and generate higher profits. The economic condition of the country is having an major impact on the sales of the firms which are operating in the nation (Mitaritonna et. al. 2017).
From this it can be said that France will offer better customer base and great economic support to the case company while introducing their products to the new market of France. Along with this the fashion industry of France shows an better growth. This is also an effective factor that shows that the company is having great opportunity to grow in the fashion industry of France. Also Paris is an great city for international expansion that can help the firm in getting several additional benefits. Moreover the GDP of France is also growing and also the country had faced less adverse effective of the pandemic. France is working effectively for recovering from the negative impact of the pandemic on the France economy and expecting to recover it by 2022. According to these factors it can be said that case company should focus on taking better advantage of the great economic condition of France and should enter into the fashion industry of France.
When the firms are entering into the new marketing then they have to focus on different legal rules and regulations related to the international trade and global firms made by the country. Boarders have a different laws and regulations and the taxes which are going to be implemented on the raw material or products. The government will not be the same, there will be changes in the legislation which would affect the activities that the corporation will have to carry out. Legislative bodies will be comparable, resulting in the firm's current value remaining unchanged, but investments in commerce and transportation will be made. The rules and regulations of the nation are having an major impact on the mode of entry that can be used by the firms while entering into the new market for doing business.
The France government had made an modern labour rules which focuses on growth and ethics which ensures better growth of all the firms entering into the France market for trading (Prosser, 2018). France government is having clear rules and regulations for all the firms operating in the nation. Moreover the government had made same rules for foreign and indigenous companies operating in France. From this it can be said that the Hawthorn would not face much issues while operating in France and managing the business operations. Also the company is having greater availability of highly skilled and trained workers. This is an another advantage for Hawthorn while entering into the France market. The company would be getting great opportunities to grow and do business effectively in France.
While offering the products and services to the customers the company needs to ensure that they should have better market for their products. Hawthorn is operating in fashion industry and is the cloths manufacturing firm it is important to operate in such a nation that is having growing fashion industry. The demographic factors are very significant for the businesses to manage the sales in an particular area. Different demographic factors such as income, age, cultural background, family status, education level and geographic region variables are important for the businesses. All these factors are having an impact on the buying behaviour of the customers and their buying preferences (Blazquez et. al. 2019). Due to this reason it is essential for the firm to focus on all such factors while analysing that the new market will appreciate their products and services or not. It is important for the Hawthorn to identify that the demographic factors align well with their products then only they would be able to expand their customer base.
The better economic conditions of the citizens of France allow them to make a purchase. Along with this the customers of France are having an trend to keep themselves updates with the fashion trends and wearing the most fashionable and trendy clothes. People will spend on the products and services of this business as they are serving the best quality and fashionable cloths. The French population is very influenced to modern Western style clothing. Better income helps the individuals to purchase fashionable clothes. From this it can be said that the case company is having great opportunity to expand their business into France. Customers demand new products and services, which will ensure that the company continues to operate and process for them in the market of France. Hawthorn needs to ensure that they should understanding the fashion sense of France population that would help them in being more effective in the new market.
The France population is highly educated and this is one of the another benefit which would help the company and will help them in creating better customer base. Due to educated population and fashion trend it would be easy for the case company to get highly skilled, educated employees for their firm. Along with this the skilled labour will help the company in adapting the technological advancement. It can be said that the different social and cultural factors are also having an role to play in the internationalisation as it affects the businesses. The company's demand must be high, and this can only be achieved if the macro environment's base is properly understood. The market will be more competitive, but if the company is aware of their marketing and commercialization strategy, things will run more smoothly. From this it can be said that the different demographic factors would help the case company in getting benefits while operating in France for doing business (Frans and Aryani, 2020).
Expected competition in the new country
Competition is one of the most important factor that affects all the businesses operating at local or international level. While working in the business world the companies needs to understand that how the competitors would affect their profitability and operations in an particular environment. The fashion industry is one of the most popular international industry in which the large organisations offer high level of competition to all the firms operating in this industry. In France the case company would be facing competition from all the MNCs operating in fashion industry such as Zara, Gucci, Louis Vuitton, Adidas, Nike, Hermes and many more (Jones, 2017). These are the international firms which would offer higher competition. Hawthorn have to focus on developing better relations or pairing with these firms then only they would be able to enter into the industry and managing competition from the top competitors. Along with this the case company have to focus on developing effective marketing strategies for gaining competitive advantage over others.
Not only the international firms but the local firms operating in the fashion industry of France will offer high level of competition to the firms. The local cloths manufacturing firms such as Le France, Balas Textile, MLG mathinier, Digitfit Mode, Alanic Global and many more (Fratocchi and Stefano, 2019). All these firms are also offering high quality and fashionable clothes. Due to this reason it is important for the case company to focus on developing effective strategies for entering into the new market for doing business. Product differentiation can be an effective strategy that can be used by the company for addressing the issues related to competitive. Moreover this can also offer competitive advantage to the case company. It can be said that the use of better marketing tools and strategies are required to be taken in concern by the businesses.
International marketing strategies and mode of entry
While working on internationalism the company needs to focus on making different strategies that can help them in remaining effective in the industry. The case company is entering into an highly developed nation due to which better strategies are more important than only the case company would be able to survive in the fashion industry of France. The different factors of the target nation will affect the business in a significant factor. The company would be facing diverse challenges and issues in the new market. One of the greatest challenges is to use an effective mode of entry for entering into the new market. Along with this the marketing strategies and other strategies are required to be designed in an appropriate manner for establishing the firm properly in new market (Soundararajan, 2018).
Selecting the Mode of Entry
During market expansion it is significant for the companies to use the most appropriate entry mode while entering into new market. The case company can use all the different mode of entry such as franchising, joint ventures, strategic alliance, partnership, exporting and licensing. The fashion industry of France is highly competitive and due to this reason entering into such a market is quite challenging. In this situation the company should focus on forming strategic alliance or joint venture with the local clothes manufacturer of the France. This would help them in reducing the issues related to legal restrictions and rules. Although the France government supports the international expansion in their nation due to this reason the company would not face much issues related to legal restrictions and trade rules. Along with this the company is having better benefits related to risks as in the joint venture the risk and benefits would be shared among both the firms. This would help the company in reducing the issues related to financial risk and other risks (Blackburne and Buckley, 2019). Moreover when Hawthorn would work with the local manufacturer then it will help them in getting into the industry in an easier and efficient manner. So it can be said that while selecting the mode of entry the case company needs to focus on all the long term and short term perspectives.
Making Pricing strategy
Pricing strategy is an significant factor which affects the sales and profitability of the firm. The different factors of the market are having a major impact on the pricing strategy. The economic factors are having a major role for the firms for setting the pricing of the products in the particular market. In case of the current report France is having better economic developing and the major section of the society is having better income as well. Along with this the France population invests better capital on their fashion and clothing. Based on this it can be said that the case company can keep their price average so that the people can easily afford them (Ali and Anwar, 2021). Also they can focus on giving the discounts to their regular customers and the companies giving bulk orders to them. Value based pricing strategy, cost plus pricing strategy and the competitive pricing strategy would be appropriate for the case company. Among these the competitive pricing strategy would be the most effective for Hawthorn while establishing themselves and entering into the New France market.
Product diversification for the new market
Products offered by the frim needs to be specific according to the market trends of the particular market. If we compare the fashion industry of UK and France then France is more fashionista as compared to the UK. Also the mind-set and customer preferences would be different. For this it can be said that it is significant for the case company to focus on offering greater customisation to the customers (Jain et. al. 2017). Hawthorn should focus on analysing the fashion trends of France and then should offer products accordingly. Although the company should focus on keeping the quality high so that it would help them in creating a positive brand image in new market.
Marketing and promotional strategy for new market
Marketing strategies and promotion approaches are significant to be considered while working on the new market. The company have to gain attention of the customers and have to create positive brand image in the France market. For this the company should focus on using the combination of both online and offline marketing strategies. This would help them in attracting the customers. Also the company can offer different discounts for attracting the customers towards their brand. Along with this the company should also focus on using digital marketing and influencers marketing effective as it is very attracting and important for the fashion industry of France (Tallman et. al. 2018). So it can be said that effective marketing strategies need to be employed by the Hawthorn for establishing themselves properly in the new market.
On the basis of the above mentioned report is can be said that there are different factors that are required to be considered by the firms while entering into the new market for doing market. The market conditions and the diverse factors of the external business environment are required to be taken in concern while expanding the businesses. The above mentioned report had explained that the economic conditions of the target nation, demographic factors, competition and the marketing strategies and the mode of entry are the most important factors that are required to be considered by Hawthorn while expanding into France. Form this report it can be said that the customers' demands and supply can be met if a good workforce is hired and effective strategies are employed in accordance with the company's plans. The business environment must be understood in order to ensure that appropriate improvements and actions are implemented in accordance with the strategy to ensure that risks are minimised.