Critical analysis of market entry strategy of Bershka BSK Espana S.A. - Контрольная работа

Critical analysis of market entry strategy of Bershka BSK Espana S.A. Abstract The report critically analyzes the Norwegian apparel market evaluating its attractiveness suggesting potential market entry for Bershka BSK Espana S.A. The report starts with the critical literature which describes tools and frameworks used for analysis. The next part of the report concentrates on the evaluation of the apparel industry. For the purpose of analyzing the major forces impacting the company’s profitability level and the intensity of rivalry, Porter’s five forces framework was used, following the PEST analysis to estimate the external environment of the company. Competitors analysis was then conducted to determine key competitors and their position on the market. Detailed analysis of key success factors was used with the evaluation of company’s ability to meet those factors. Then, the report focuses on the company’s overview including its business model and forms of development. To evaluate company’s competitive advantage Porter’s generic strategies framework was used followed by integration-responsiveness framework to analyze company’s strategy. The next part of the report reviews the issue of market entry strategy constituting the base for conclusions and recommendations. The results of the report suggest that Norwegian apparel market is an attractive destination for the company due to the favorable forces influencing the environment. The structure of the company’s business model is another factor suggesting that the expansion on this market can be successful. However, there are some aspects the company should take into account before entering this market like the power of advertisement or the possibility of online shopping. The aim of the assignment is to critically evaluate the Norwegian apparel market and analyze the potential market entry strategy of Bershka BSK Espana S.A. Critical literature review Companies decide to expand their businesses on overseas markets due to different motives such as gaining access to new markets, decreasing risk resulting from diversification in different countries, balancing losses in one country by earnings in other country or gaining greater profit from large investments to name a few (Rodriguez et al 2010). Yip (2003) in turn, groups different motives into four drivers of internationalization distinguishing market, government, cost and competitive drivers. Jurevicius (2013) sums up that «the outcome of PEST is an understanding of the overall picture surrounding the company». In addition to PEST analysis, Porter’s five forces framework was also used to evaluate the environment of apparel industry since the framework allows to categorize and analyze major forces influencing the intensity of industry rivalry and its profitability level (Jurevicius 2013). In order to define the company’s competitive advantage, Porter’s generic strategies have been used. Porter (1998) claims that by skillfully aiming at the cost leadership, differentiation or focus strategies a company can achieve substantial and sustained competitive advantage over its competitors. Furthermore, the appropriate entry market strategy is another issue with which international companies have to struggle (Hill 2012). Young et al (1989) in turn, emphasizes that this choice can have a significant influence on a company’s performance when operating on a new market and also stresses that this decision is one of the most complex a company can face. 486) «the various modes for serving foreign markets are exporting, licensing or franchising to host-country firms, establishing joint ventures with a host-country firm, setting up a new wholly owned subsidiary in a host country to serve its market and acquiring an established enterprise in the host nation to serve that market». Internationalization is a complicated process demanding preparation and adequate research in order to be successful. There are lots of frameworks and analysis making this process easier allowing companies to predict how much profit they can gain. Last but not least, entry market strategy is also crucial for the company’s success therefore it is important to choose such a strategy that will be adequate to the conditions and the environment on particular market. Apparel industry overviewstrategy industry market In the past years Norway’s apparel market recorded growth both in volume and value sales which both amounted to 2.4% on average providing a constant growth year by year (Appendix 1 and 2) (Euromonitor, 2013a). High level of GDP per capita standing at US$101,518 together with low unemployment rate totaling 3,5% in 2012 sustained the strong national economy and contributed to the positive development of the market inspiring consumers to increase their expenditure on apparel (Euromonitor, 2013a; Euromonitor, 2013b; Euromonitor, 2013c). In the following years up to 2017 the Norwegian economy is expected to continue its progress with growing real GDP on aver