International Business Project Market Entry Report
Instructor : Veselina YankovaDone by : Shamma Abdulla H00324721
Table of contents
TOC o “1-3” h z u 1.Introduction : PAGEREF _Toc7628328 h 32.Company Background : PAGEREF _Toc7628329 h 33.Country and market analysis : PAGEREF _Toc7628330 h 44.Marketing Mix : PAGEREF _Toc7628331 h 65.Staffing Policy : PAGEREF _Toc7628332 h 76.Market Entry Strategy : PAGEREF _Toc7628333 h 77.Strategy For International Business Operations : PAGEREF _Toc7628334 h 10Bibliography PAGEREF _Toc7628335 h 11
Introduction :The purpose of this report is to apply the knowledge and the information we gain from the globalization course about doing business . so in this report we chose to write about a local company that is called Feathers Fashion .
Feathers Fashion has the opportunities and the potential to expand outside the UAE that it will help the company to grow outside the UAE and to considered as a globalization company so I decide to expand Feathers Fashion in china .
In this report we will discuss some important topics about globalization such as the country and market analysis , marketing mix , Staffing policy, market entry strategy and the Strategy for international business operations .
Company Background :
Feathers Fashion is the first Arabic luxury brand which they sell jewellery, bags, Watches and Wallets with a very high quality and it is founded in October 10, 2010.
Khalid Baseed is an emirate business man and he is the founder of Feather fashion hes designs is inspired by the Arabic culture and traditional architectural patterns . CITATION ABO2 l 1033 (ABOUT US , n.d.)
Feathers have many branches around the UAE the have a shop in :
Yas Mall, Abu Dhabi
Dalma Mall, Abu Dhabi
Al Ain Mall
Dubai Festival City Mall .
Mirdif City Centre, Dubai
And they only have one branch outside the UAE which is in Mall of Qatar at Doha .
Country and market analysis :china is an economic superpower and truly massive place it is consider to be the world second biggest economy in the world and it one of the most populous countries of the world with over 1.4 billion people .China’s growth and size are setting the country up to be a powerful in global markets which make it a very suitable place to expand your businesses there .
Many businesses are interested in doing business in china because it is a big population which will help them increase their profits and also there is many people who go to china to buy staff and product and sell it in their country .
If you want to expand and start a business in china the company have to go through many process consist 14 step to able to start the business in china first of all you have to register for company name pre approval , open a preliminary bank account , get a certificate of funds and then a capital verification report next you have to obtain a business license certificate and the company seal purchase approval form from the local police department then you can purchase your company seal then you will need to get an organization code certificate the next step is to register for state and local taxation and then register with the statistical bureau once complete you can open a formal bank account transfer fund from the preliminary bank account and file for authorization to buy uniform invoices finial you must file for recruitment registration and then you will be ready to do business in china . CITATION TMF131 l 1033 (Group, 2013)When any company want to start doing they have to determined and analysis the factors .There is many Factors that makes china an attractive market and drive Investment In China .
The attractiveness analyses will include 3 factors the External factors , Customer based factors Industry and Business related factors .
Some of the external factors that make the market attractive is the political stability and the Chinas Free Market System .
China’s political system refers to the political structure, fundamental laws, rules, regulations and practices that are implemented in China’s mainland and control the state power and government .
The Communist Party of China (CPC) acts the ruling political party but also cooperate with 8 other group to disuse and manage state affairs the eight parties. But as for foreigners company you cant be a member in the CPC but if you want to be a CPC member you have apply to become a Chinese citizen .
Free Market System is a type of market where the price for goods and service are freely set between the dealer and purchasers by consent .
China economic become one of the largest economics in the world since they underwent transition to a free-market economy in the late 1970s . CITATION Chi18 l 1033 (Chinas Free Market System , 2018) .
Free market economy mean that the Chinese Government will not interfere in the business and economic development and free market have many advantage such like that this kind of market offer wider verity of goods and service than other markets .
China have many Product and service available to meet consumer needs which make it hard to compete in the this country but if Feathers Fashion want to Stand Out From Competitors in the market they should understand Chinese customers need a Create a memorable culture especially that the UAE and china have a strong relationship which will help increasing the profit of the business .
Some of the Customer/Competitor based factors that make the market attractive is the availability of a product to meet the customer need .The company should make sure to satisfy the customer by providing them with high quality product and it should be available because if the products are not available the customer will move to the competitors .
The Chinese businesspeople and entrepreneurs are increasingly showing the ability to adapt to new opportunities and the desire and capacity to innovate for themselves, rather than copying whats already out there. So the competition in china market is high but we believe that competition leads to innovation which will help our company to compete and improve our product to be unique .
Expanding in china is a big risk because china is highly competitive market and the Market Efficiency of the Chinese will affect our business if we do not provide our customer with new and unique product .
Before opening a new business in china we need to be aware of some Barriers that we may face. China have a fast-developing market which mean that will lead to fast-changing rules, regulations, and tax rates(Tariffs) those things may become a trade barriers .The tariffs is a type of trade barrier that acts as a tax on imports so that it will lead to increase the price of the imported products so that it will causes the customer to buy from the local market .
China is one of the most populous countries of the world with over 1.4 billion people which will make it a suitable labor force availability and especially that in china market female labor participation in China falls behind male labor participation so we decide to hire 70 % females and 30% male in our shop in china .
The unemployment rate in China was 4.05 percent at the end of 2015 and is projected to remain stable over the next few years which will make labor force available . CITATION Lii l 1033 (Jaaskelainen, n.d.).
Transport costs is the expenses in moving product to a different country and in our company we will pay for four things that is related to the transport cost such as the movement cost is the cost of moving the product from the UAE to china ,the Inventory cost ,packaging for example if the transporting may face a bad road condition we need to have a stronger packaging and the last thing is the insurance is the cost of proportional to risk of damage and loss in transit .
Marketing Mix :
The target consumer for Feathers Fashion is both females and males because Feathers offer watches , bracelets and caps for males and they provide for female Jewellery, Handbags and women shoes and all there product are made in UAE with a high quality .
The marketing mix is the combination of elements that will help to create the marketing strategy for the company and it has 4 factors they also call it the 4ps of marketing mix that consists of the price ,place, product and promotion .
The marketing mix for Feathers Fashion in china is that the price of the product differs from one product to another but the price start from 100 AED to 4000 AED ( 183.58 Chinese Yuan to 7343.24 Yuan ).
The best location where people can buy our products is in Wangfujing Street it is located in Beijing, North China Wangfujing Street is one of the biggest and most popular pedestrian streets in China that why we chose to expand there . CITATION Hin18 l 1033 (Hinsbergh, 2018)
The product Feathers will other in china is Watches , Handbags and Jewellery infusing high quality luxurious goods with an Arabic flare and the designs is inspired by the Arab cutler and characteristic .
The promotion factor is designed by the organization to increase sales and it take many different forms with advertising and personal selling , the main purpose of advertising the products is to attract attention .Using social media to advertise in china it not easy because in china there is no Facebook , twitter ,YouTube and Instagram so that why will advertise our business in china by giving the consumers a discounted prices because everybody loves discounts.
Staffing Policy :
There is 3 type of staffing policy the ethnocentric , polycentric and the geocentric each one of these type have an advantage and disadvantage .
The ethnocentric type is when all the key management position is filled by the parent country national and the polycentric is when the host country national manage subsidiaries and the host country nationals are employed to staff all positions in the company .the last type is the geocentric they seek to hire the best people regardless of nationality .
Feathers Fashion in china will use the geocentric type because it will help the company to make best use of human resource and will help to build a strong unifying cutler and informal management network which will affect the company in a positive way .
Market Entry Strategy :There are a many of ways and strategy in which a company can enter a foreign market and expand their . There is 6 types of foreign entry modes into international market the first type is the Exporting , Turnkey projects , Licensing , Franchising , Joint venture with a local company and the last way is Wholly owned subsidiary .
It is important to understand the different types of each entry mode to use in the company and to know the advantage and disadvantage of each type .
Exporting is the process of producing goods and service in one country and then transport it to a foreign market for distribution and sale .
Some of the advantage of using the Exporting way is:
it helps the firm achieve experience effects & location economies .
Increase the sale and profit of the company .
Diversify customers base and reducing the dependence on the home market .
Exporting has some disadvantages such as :
High transport costs .
Tarif barriers .
May compete with low-cost location manufactures .
The Turnkey projects is a contract under which the company agrees to fully design , construct and equip a manufacturing ,business and service facility and turn the project over to the purchaser when it is ready for operation for a remuneration . CITATION wha06 l 1033 (what is a turnkey project ?, 2006).
Turnkey projects advantage :
Less risky than conventional FDI ( Foreign Direct Investment )
Can earn a return on knowledge asset .
Turnkey projects disadvantage :
The company has no long-term interest in the foreign country.
May create more competitors .
Licensing is a contractual arrangement between the licensor and the licensee it is a permission to use intellectual property such as the patents ,trademarks ,copyrights and design . It allow the licensee to use and sell the idea ,design and the name for a fee .
The Advantage of using Licensing mode for carrying out international business :
Avoiding financial risk .
Avoids barriers to investment .
Knowledge of locals markets .
The disadvantage of using Licensing :
reputation of the company may be in the hands of others.
Potential conflicts with licensee .
Franchising is where the business owner has developed a successful business model and then sells the right to the third parties (franchisees ) to operate the business model in other country . CITATION fra l 1033 (franchise definition, n.d.) .
Franchising advantage :
Companies can quickly build a global presence .
Minimized growth risk .
Less control over the manager
difficult to detect poor quality because of the geographic distance
the other way is the Joint ventures is a partnership of two or more person engaged in a business and most joint ventures are 50:50 partnerships .
The Advantage :
the company avoids barriers to investment .
partnering with locals partners is an advantage because they have knowledge of the local market ,cutler ,language and the political system .
The disadvantage :
partners cultures may clash
potential disagreement between business partners .
The last entry mode to use is the wholly owned subsidiary it simply means that is a company that is completely owned by another company and the firm owns 100 percent of the stock .
The advantage of wholly owned subsidiary :
Reduce the risk of losing control over core competencies .
Realize experience effects .
The disadvantage is :
Risk of setting up overseas operations
We will use the Franchising mode to expand Feathers Fashion because the franchise system is capable of carrying our brand longer and especially that china has the largest franchise system in the world .
Strategy For International Business Operations :There is four Strategies to compete in international markets the global Standardization strategy , Localization strategy , Transnational and International strategy :
The global standardization strategy focus on increasing the company profitability and profit growth by reaping the cost reductions that come from the economics of scale and location economics .
Transnational strategy is when companies aim to jointly achieve the complex combination of low costs through location economies, economies of scale, learning effects.
International strategy is when the company take products first produced for the domestic market and sell them internationally and limit customization of product offering .
And for feather we will chose to use the localization strategy which mean that we will increase our profit by changing and customizing our product so that they match tastes and preferences the customers in china .
Bibliography BIBLIOGRAPHY ABOUT US . (n.d.). Retrieved from feathers-fashion:
Chinas Free Market System . (2018, 01 02). Retrieved from ukessays:
franchise definition. (n.d.). Retrieved from franchisealimentaire:
Group, T. (2013, Mar 20). Doing business in China: Don’t under estimate the complexities . Retrieved from youtube:
Hinsbergh, G. V. (2018, August 9). 5 Most Famous Shopping Streets in China. Retrieved from chinahighlights:
Jaaskelainen, L. (n.d.). Employment in China – Statistics & Facts . Retrieved from statista:
what is a turnkey project ? (2006, Sep 23). Retrieved from timesofindia: