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International Market Assessment and Market Entry Strategies

University: N/A

  • Unit No: N/A
  • Level: High school
  • Pages: 18 / Words 4503
  • Paper Type: Assignment
  • Course Code: N/A
  • Downloads: 34
Question :
This assessment will require to give further answers of:
  • Elaborate the evidence in systematic research.
  • Evaluate general analysis with critical engagement with information and functions.
Answer :
Organization Selected : Zalando

INTRODUCTION

International marketing is the most simplest application that is used in marketing principles for more than one country, therefore, it has its own importance in marketing. The report main aim is to provide deep knowledge related to marketing strategies which are used in order to expand their current business. The chosen company for this report is Zalando which is one of the medium size firm and wants to expand its current business step by step. The company deals in retail sector and offer clothing, footwear for men, women and children. Now the company wants to expand their current business at further level of success. Report determine the most prospective market to enter through market opportunity assessment. Further report also describe the investment opportunities, effects of government, interventionist policies, impact of regional integration initiatives and threats of each markets. The report also recommended which county the firm should enter first with proper justification. Report also describe the market strategy and which is the most suitable among them in order to expand their current business with proper recommendations.

Identify The Most Prospective Market To Enter

Zalando is one of the most rapidly growing company and it deals with foot wear and clothing of men, women and children. Now the company wants to expand its business in further country in order to generate more revenue and profit. For this reason, the company uses market opportunity assessment. In today's world, the brands have pressure to stay connected in an increasingly competitive market place (Reid, 2018). In order to be successful in the current market, there is a need to connect new products and services which should be offered to the customers. By understanding the market as well as maintaining the consistent awareness of challenges as well as barriers if entry and growth. To determine these things, there is a needs to do market opportunity assessment which is as follows:

Market Sizing And Growth Plan:

It is the first assessment which help Zalando to determine the actual size. The quoted company is a medium size firm and among all market, it has been analysed that UAE is one of the most suitable option to expand their current business because the country has good political stability and therefore, choosing UAE is the suitable option for the company. For this, estimating the number of target customers is another option which supports and determine the actual scenario. Therefore, Zalando Chooses UAE because the country has a availability of maximum products, resources and there is a demand of new products and services of clothing or footwear which help to generate more revenue and also increases the sales of a company (Kumar, 2018). After that the penetration rate of the offered products should be low so that it will help to establish competitive advantages. Because if the offered product is of high rate then the category of products is mission critical and mandate for the regulations. Through proper monitor and awareness related to market, the company can easily determine the market size and the proper generation of profit for the firm.

Industry And Segments Attractiveness:

This is another market opportunity assessment which help to determine which market should be chosen. Therefore, Zalando has to determine the target segments benefit as well as attractiveness and then which products is actual beneficial for the product and the demand of UAE people is quite differ from the other countries. Therefore, Zalando decided to expand its current business in UAE and it can be done through qualitative data. By taking survey from the people, the quoted company will easily determine the exact and also fully the meet of their customers needs. By analysing the needs of their customers will helpful for them in order to provided the exact service to their customers (Vedula, York, and Corbett, 2018). In addition to this, if Zalando has unique selling proposition then it will help them to create best sell for their product and by targeting the exact market which will be helpful for them in order to gain high competition in market.

Porter Five Force Model For Turkey:

Basis

Turkey

Egypt

UAE

Threat of substitute

For Zalando, threat of substitute is high because to introduce new product, the company needs to invest much money and which is quite cost effective.

In Egypt, the quoted company has also high power of substitute, therefore the company can also affected from the rival company's business strategy.

In UAE, the company has low threat of substitute because in UAE there is no much stores who offered best quality of products which are offered by Zalando.

Bargaining power of suppliers

The supplier range in Turkey is low and if there are some then they also have some power to control the prices.

The supplier range of the country is low and many of the customers also switch to others company because they offer in low prices (Salinas, 2018).

The bargaining power of suppliers are high, the company also have good supply power in UAE so it can expand the business in it.

Bargaining power of customers

The bargaining power of customers are also low and for this reason the company cannot expand the business in it

The buyers are not so powerful because their social lifestyle is quite different from other people and therefore, the company faces low bargaining power of buyers

In UAE, people demands for different clothes and this can be fulfilled by Zalando if they fulfilled their demands if the business is expanding their new unit in UAE.

Threat of new competitors

If the company has its brand image in market then it will not affect by other rivals and in Turkey there is a wide range of companies which offered their products at low range. Therefore, to expand Zalando in turkey is not helpful to generate revenue.

In Egypt, the company is not so developed and there is so small number of new entry companies therefore, it will not be helpful for Zalando to expand their business in a quoted country.

UAE is more developed country and the threat for Zalando to expand their business in UAE is helpful such that a new entrant faces problem because of new rules and regulation and this can be helpful to generate more revenue (Sheng, 2015).

Intensity of rivalry

There are few competitors in Turkey and it will not be able for Zalando to expand the business in it.

In Egypt the competitive rivalry is quite low because the competition is low from other countries.

In UAE, the intensity of rivalry is also high because in a market if the competition is high then it will also help to generate more revenue and expand its business.

 

Market Requirements And Barriers To Entry:

the requirement of market is different in different country and it is quite necessary for the company to determine the exact need of the market. For this reason, the company needs to do market opportunities assessment which help to identify which market is beneficial and on the same time, the company needs to identified different barriers which creates hindrance in order to enter into new market. In Turkey, the market requirement is quite different and the suppliers are also low and on the other side, in Egypt the demand of their customers are also not over which creates force to the Zalando in order to expand their business in Egypt. Therefore, the company also meet out the basic requirements of their company (Market, 2017). On the other side, in UAE, the company is in demand because many of the customer are also demand of their favourite clothes and this can be overcome if the company is in UAE.

On the other side, whenever a new country is entered into new market then it is quite necessary for the company to follow all the new rules and regulations which helps to establish its new unit into a market. Therefore, if the company also wants to entered into new market then it will helpful for them to follow all the new rules and regulation. Similarly, in the case of UAE, the rules are not so difficult to follow and it can be easy to follow.

Go To Market Strategy:

It is a plan that is actually used in order to specify how the company will reaches their target customers and then achieve the competitive advantages. Through this market strategy, Zalando will easily come to know which products will needs to launch in which city and this assessment criteria will helpful to determine the exact needs of their customer demand and through go market plan, the company will also realize the exact needs of their customers.

Explaining The Market Assessment Opportunities

Investment Environment:

It refers to the exchange of money wealth or the international economy or domestic economy that directly affect the prices of the values that are actually effect the products. In addition to this, the prices of financial assets, in the market of financial which further affect the risk of financial markets (Helfat and Martin, 2015). As the GDP of the country affect the company's overall structure but when investment environment affect the actual performance then it directly affect the company overall working performance.

In addition to this, if the investment environment comprises all types of investment opportunities and the market structure which help to facilitates the buying and selling investments. Therefore different types of securities and institutional set up are also affect the actual working performance of the company. In the context of Zalando, if th e company is actually affected by this intermediaries then at a result, it also comes to affect the actual environment of the company and it will directly or indirectly affect the buying power of their customers.

Effects Of Government Interventionist Policies:

It is an economy policy which is differ for every country and this also favouring the government intervention in a market process in order to correct the market failure and also promote for the welfare of the people. The main aim of this is to promote the economic growth and increases the employment, raise the reducing prices of the company so that it will further help to manage the money supply and interest rates (Van Hoa, 2017). This intervention are generally made to improve the performance of the country's actual economy. The common example of this is to subsidies and information or private benefits.

The effect of government intervention policies are helpful to many company because it provide employment opportunities as well as reduces the prices of their offered products so that it will be helpful for their customers so that they will enjoy their shopping from Zalando (Schembera, 2018). Many countries faces high relative poverty and in order to overcome from this, country's economic system has to be managed which further help to many lower income who suffer from social exclusion, negative externalities etc. In the context of Zalando, before entering into new market the company has to monitor all policies of government because it may creates obstacles in the way of progress.

Market Potential:

It is the entire size of the market for a particular product in a specific time. This can be easily evaluated through the sales generate for a particular period. To determine the exact market of the product is a best and successful way to analyse the current environmental condition which may effect the market potential (Market potential, 2018). As Zalando wants to enter into new market and for this reason the company has to determine the customer base of their existing firm and for new market, by conduction primary data which is helpful for identifying the exact need of their customers. After this, taking the review of the competition is another strategy which is helpful for the company to launch which product on exact date. By good customer service will help Zalando to keep interacting the activities. Therefore, this market potentiality also depends upon the profitability and to forecasting the profitability is important to understand the market potential.

Another important key aspect for market potential is to determine which customer type is actually like by the customers. For Zalando, as it deals with clothing and therefore, this will be helpful for the company to sell the same kind of product in other country also because it will help to keep sustaining its brand image in market.

Regional Integration:

It is a simplest process that is used when the neighbouring states enter into an agreement in order to upgrade the cooperation with some institution or rules. The main objective of this process is also varies from political to economical factors or through political economy also (Platonova and et.al., 2018). Through this process, it is also achieve the broader socio- political and security objectives that are defined through their country's government. Therefore, it also creates some impact upon the company through intra regional trade that helps to focus on the level of trade and commodity exchange rate between themselves that further reduces the inflation and tariff barriers which are associated with the foreign markets that help to growing the prosperity.

This also creates the impact upon the company's actual performance therefore, if the company wants to enter into new market and it can be overcome through the regional integration which is quite successful for also challenges for the pre- existing global order.

Basis of comparison

Turkey

Egypt

UAE

Investment environment

Turkey's economic condition is quite stable and that is why the investment environment of the company is quite affected regarding investment environment.

The economic condition of the Egypt is moderate and therefore, the investment environment of the affected the GDP of the country.

UAE is consider one of the most developed country and therefore, the Zalando wants to invest in UAE so that it will help them to generate more revenue and maximizes the profit.

Effects of government interventionist policies

The government has their own rules and regulation which needs to be followed by every company in order to expand their business in new country (Abu ELSamen and Akroush, 2018). Turkey's government policies are quite fluctuating and therefore, to invest in this country is not affordable.

The effect of government policies are quite quite effected to the company's overall performance and therefore, for Egypt it takes too long time to invest on such market and therefore, the company did not.

UAE government policies are simple and adjustable. Therefore, Zalando can operate their business and take this country as a market entry mode for maximizes the profit.

Market potential

The market potential for Turkey is so strong but the size of market is also good but the customers base is not so strong to forced company to enter into this market.

For Egypt, the market potential is also so strong but the customer did not demand for the clothing and footwear which company actually offered. That is why Zalando did not enter

UAE is one of the developed country and there is a demand of people to invest in such a market and therefore, the company needs to invest into such.

Regional integration

The regional integration, of the Turkey is quite strong and therefore, the company will definitely affected through political as well as economic system and that is why there is no chances to invest into this country.

In Egypt, the regional integration is also affected and the political and social condition of the country is fluctuating and therefore, there is no chances for Zalando to invest into such.

In UAE, the company actual working performance is such that it will also affected but this will be helpful (Schellenberg, Harker and Jafari, 2018).

 

Recommending Which Country The Firm Should Enter First

Among Turkey, Egypt and UAE, Zalando chooses UAE for first entrance. The country has a political stability and therefore, the quoted company chooses this. As per above analysis, it has been analysed that the country market size is quite big as compared to other country. Therefore, to chooses UAE is better option for Zalando in order to expand their current business. The economic system of the country is also stable and this is the one reason which the quoted firm chooses this and through Porter five force model, the country also did not have threat of substitute as well as new entry because there is no actual branded firm in UAE and to chooses in this it will be beneficial for the company to expand their current business (Mathews and et.al., 2016).

In addition to this, the country also grows as per the time passes and therefore, Zalando also take an initiative in order to expand their current business. In UAE people demand for new and fashionable clothing which is fulfilled by Zalando and therefore to fulfil the demands of their customers the company wants to expand its unit in UAE so that it will be helpful for maximizing the profit and minimizing the risk. The investment environment of the country is also affected the actual performance of the company and even the market potential of UAE is also better as compared to other country. Therefore, to chooses the best option it has been recommended to Zalando to chooses UAE because it well developed and have enough resources which are helpful to creates a chances to maximizes the profit as well as sales.

Presenting The Best Market Entry Strategy For Zalando

Market strategy is a mode that is helpful for a company to entry into new mode. Hence no one market strategy is wok for all international market and for most of the company, direct importing is consider one of the most simple and effective strategy which is helpful in order to establish their unit in new country. Some of the methods are as follows:

  • Direct Exporting: It is one of the simplest method which is actually selling directly into a market if the company have enough resources. Many of the company have establish new and different sales program in order to popularised their own products and brands (Ragland, Brouthers and Widmier, 2015). Through this method, Connection are directly established and agents or distributors are also helpful in order to represent their company in other country so that it will be helpful for them to increases their actual sales.
  • Licensing: The next entry method is Licensing which a sophisticated arrangements of the firm in order to transfer the rights to use the products as well as services to some other firm. It is useful for those country who have good market share in the market and who wants to grab new and long market share in another firm.
  • Franchising: The most simple and rapid market expansion strategy that is actual useful for those companies who have a good market share. Franchising work for those who have the repeatable business model and who can be transferred into other market (Marchi and et.al., 2014). While using this model, the company should have a good brand image in market so that it will be helpful to merge with another and utilize others resources and next is to create the future competition through this franchising.
  • Partnering: This method is actually successful for those market who want to invest into foreign market. Partnership means to share the ratio of profit as well as loss in equal ratio so that the risk occurring chances will be minimizes. Moreover, this market entry strategy method is useful in those market where the culture and social is different from the local market so that by investing into such a market will be helpful in order to gain market knowledge, and increases the contacts.
  • Joint Venture: It is another form of partnering and also involves the creation of a third independently managed company. These all are work together in order to creates god market brand image so that it will be helpful in order to gain high competition in market and therefore, risk as well as profit are also share in equal amount.
  • Merger and Acquisition: The most common strategy which is actually helpful for many companies who losses almost share in the market. Under this strategy, the company has a good market share and due to government regulations many company chooses only this market entry mode for the expansion of their current business (Reid, 2018). This entry immediately provided the best results such that if the company acquire or merge with other company which has a brand image in market. Then it immediately helpful to create the strong customer base and also treated by the local government in the form of local firm.

Among all market strategy, it is to be recommended to Zalando to chooses, Franchising as a market entry mode. Because the company also have a repeatable business model and have a unique brand positioning in order to expand their current business. So that choosing franchising among all is quite beneficial for the company in order to create future competition for the franchisee. If Zalando buying a franchise of the company in UAE will be beneficial in many ways and some of them are as follows:

  • The risk of business failure are decreases by using franchising as an entry mode. Choosing that company who have a good brand image in market and this will also help to establish good market share and at that time there is no need to testing the market share. Therefore, choosing franchising as an entry mode is beneficial (Salinas, 2018).
  • No prior experience is needed such as training because taking a franchise means that a franchisor should also ensure that they also have good and enough skills which are actually required in order to operate the business.
  • Using franchisee as an entry mode will also help Zalando to establish better relationship with suppliers so that it will be helpful for the company to uses and produce the best variety of products as well as services as per the needs of the customers of UAE.

Also Read: International Business Competition

CONCLUSION

By summing up above report it has been concluded that Zalando is a medium scale business and it wants to establish its new unit in UAE which is most developed country and have a stable political as well as economical status which help a company to expand their current business. Report also concluded that through market opportunity assessment, there are many factors that also affected the company's overall performance and the government intervention policies are also some times creates problems. As a result, the company got affected. Further report also concluded that UAE is the most appropriate marker which should Zalando entered first so that the profit margin of the company also maximizes. In order to entered into new market, Zalando may uses Franchising as a market entry mode because it will help to let company realize what the market is in UAE and it also help to establishes long term relationship with their suppliers. Are you worried about assignment help ? Connect with our experts online.

 

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