Iv global expanison strategies overview i macro

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IV) GLOBAL EXPANISON STRATEGIES OVERVIEW i) MACRO ENVIRONMENT OVERVIEW According to Hollensen ,when a company decides to go for internationalisation, it can lead to a selection of the international market. This selection process involves assessing macro- (including political, technology and economic) and micro-environment factors (including market potential, sizes and competition) that related to the product and the organisation. MARKET ENVIRONMENT STRATEGIES DURING INETRNALISATION
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ii) MICRO ENVIRONMENT OVERVIEW According to the Clothing and Footwear Opportunities Latin America is one of the top four potential international clothing markets for UNIQLO. Moreover, the Bank’s Ease of Doing Business (2012) ranks Mexico as the sixth easiest countries to do business due to its investment laws towards foreign investment. The political factor in Mexican government allows organisation to invest a high rate of innovation in their businesses. Therefore, Mexico is a potential market for UNIQLO to introduce its clothing brands. In addition, globalization has created positive impact on the performance of many organisations in the fashion industry. It has helped companies save time, money and effort in bringing their products to the global market. Technology plays an important role in improving business iii) ENTRY MODE STRATEGIES There are many different kinds of entry modes for business to choose when they decide to entry the market. Different entry modes can be adopted based on the organisation’s position in the market and different businesses may choose to have different entry modes . ENTRY MODE STRATEGIES FOR UNIQLO There are three key entry modes that UNIQLO can use to expand its product to Mexico, which are direct exporting, franchising and foreign direct investing. There are advantages and disadvantages for each entry mode however; licensing may be the least risky entry mode for UNIQLO in Mexican market. The first reason why this mode is the best choice for UNIQLO is that Mexico is still an unfamiliar market for an Asian clothing brand. Therefore, licensing its brand will allow UNIQLO to increase its sales capacity rapidly in the Mexican market. In addition, this entry
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mode will allow UNIQLO to establish business relationships with many potential organisations in Mexico. UNIQLO also will not have to worry about securing government contracts because this will be done by the local companies. Consequently, this will help UNIQLO to get closer to the market and attract more customers. In the contrast, there are several disadvantages that UNIQLO needs to consider when choosing this entry mode. Firstly, many big organisations, which have a large number of customers, will be expensive for UNIQLO to negotiate any business proposals. Second of all, it may be difficult for UNIQLO to control and manage its sales operations and quality control in Mexico. Furthermore, UNIQLO’s former business partners in Mexico might see UNIQLO as a competitor after the agreements expire. This will generate more costs and risks for UNIQLO.
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  • Fall '17
  • Prof. Gautam Saha

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