Expansion of Cotton on Group Business
In the world of competition, it is very important that businesses be expanded properly in order to them to be successful. However, it is not an easy task to expand business and reach to people. There are different limitations that might act as obstacle in the path of expansion. There are different sorts of difficulties that people might have to face in order to make sure that the business survives and grows at a constant rate. In order to make sure that the business grows, it is necessary to plan strategically. Different ideas and brainstorming can assist in overcoming different limitations and problems and performing well in the marketplace (Hollensen, 2017). The entrepreneurs need to strategize marketing and operational plans in such a way that they can explore new horizons and perform well in business. One such case is the case of Cotton On group of Australia, which has planned to expand its business in different markets of the world.
Founded in 1991, Cotton On is one of the leading clothes manufacturers of Australia. With a workforce of above 17,000 workers and 1500 stores across 12 different countries, the Company has been successful in making a good reputation for itself. The company started with the manufacturing of clothes for women. However, with passing time it started making menswear and kidswear. It has gained its name as it uses pure cotton for making the clothes. Apart from manufacturing of clothes, the company is also exploring the business of different kinds of stationary and gifts. The company had been successful in making quite an impact in the industry of fast fashion. Despite facing significant competition from different international brands, the company has been successful in making its business a success on a world basis. The key competitors of the company in the business dwell from countries such as U.K. and U.S.A. as a result it can be understood that the company has successfully competed against the odds and has continued to flourish its business.
However, with the trend of globalization, it has become necessary for the company to start business in markets that are still unexplored and has huge potential to grow (Davies & Ellis, 2000). In order to make sure that the company is able to survive in the international market, it has become necessary to strategize plans and ideas that would help the company to get a global exposure and gain the trust of the customers. In order to make an impression in the minds of the customers, the company has to take the path of sophistication and use technology to its aid (Lee & Carter, 2012). It is not technology, which would help the company to achieve its vision of internationalization (Malhotra & Hinings, 2010). The company also needs good partnership and aid from local companies to gain trust of the customers of the new markets. In order to do so the company has to consider different issues and factors that would have significant amount of impact on the expansion. These obstructions are not limited to just technological and influential. There are different issues such as political and economic paradigm shifts that might affect the performance of the company in the global market (Gillespie & Hennessey, 2016).
Strategies for Entering New Markets
While strategizing the plans to explore new markets, the first thing that needs to be considered is market that the company is about to explore. While globalization it is very important that every company pays special attention to the different factors such as logistics. Logistics is a very important factor that needs to be sorted out at the starting phase (Evans, 2017). Since logistics is the factor that decides whether the demand can be fulfilled, therefore it is necessary to sort out the issues associated to logistics in the markets where the company is planning to expand. Since logistics is responsible for maintain the supply chain management, therefore it can be understood that the company has to get a proper understanding of the logistics of the respective countries in order to make sure that the company can perform well in the global market. In case of Cotton On, the company is planning to explore the Asian markets. Therefore, it is important that the company sorts out the logistical issues so that the supply and demand is maintained properly. Cotton On needs to make sure that when the clothes are manufactured in Australia, it would be able to deliver the items in the Asian markets on time and meet up with the demand. In order to make sure that the company is able to deliver the products on time and in a proper manner, it is necessary for the company to make contractual deals with local logistics operators who would guarantee punctual and timely delivery of goods (Ghemamat, 2007). For the international logistics, the company can adopt the same strategy of building partnerships with different shipping and international logistical solutions provider in order to sort out the issue of supply chain management.
The company also needs to sort out the issue of online marketing. The company had been carrying out its online business in different countries across the world. However, when exploring new markets of Asia, the company needs to strategize plans so that it is able to reach to the new customers easily. For that purpose, the company needs to make changes in different online business policies. One significant factor that needs to attention is the way the company is planning to win the trust of the new customers and how it is planning to reach to the customers. Since the company is just entering the new markets, therefore it is important that the company offers special offers and discounts so that it can grab the attention of the customers. The special offers might include special discounts for online purchases and free shipping.
The location for business is another significant issue that needs to be addressed. For a company that is entering new markets, the company needs to place itself strategically, so that it is able to carry out its business in a convenient manner (Burt, Mellahi & Sparks, 2002). For Cotton On, in the initial stages the company needs to establish its stores in the metropolitan cities so that the company cannot only reach to a larger mass of potential customers but is also able to manage its logistics without many issues. Additionally, setting up the stores in metropolitan cities would help the company in marketing as well. The affordability of the metropolitan city dwellers is high. This would help the company to gain more customers in much lesser time. The company can adopt a flexible pricing policy in the metropolitan cities.
The company also needs to be well accustomed with the local tax system, rules, and regulations so that it is able to carry out business in a well-organized manner without facing legal issues (AT Kearney, 2016). Apart from the trade licenses of the local markets, the company also has to focus on taking care of the logistical permits that require special permissions.
While exploring new markets, the company is bound to face new challenges. These challenges can be environmental, currency exchange, trends, competitors and demography. Since the company focuses on cotton products and clothing, therefore it is important to consider the locations where the company is planning to explore its markets. Considering the fact that the company is planning to explore different Asian markets, it can be said that the fact that the company sells cotton products will be in favour of the company because of the weather and climatic conditions.
Currency exchange is also an issue that requires special attention. Different countries have different currency systems. Therefore, it can be said that with the continuously changing currency system, it has become a matter of concern for the businesses to maintain a satisfactory business flow. Due to the changing currency systems, the company need to focus on the pricing of the items so that the changing of currencies does not affect the growth of the company. At the same time, the company also needs to make sure that the prices do not affect the customers and it becomes difficult for them to afford the items (Wouters, 2012). Since the products are manufactured in Australia, the pricing needs to be done according to the Australian currency system so that the company does not face financial issues.
Trend is yet another factor that makes the market quite volatile. The taste of customers change on a regular basis. The company needs to focus on this fact and maintain a system of adopting the new trends and making necessary changes accordingly so that the company does not have to face complicacies when the trends change (Evans, Bridson, Byrom, Medway, 2008).
Cotton On needs to realise the fact that it is about to enter new markets. Therefore, it is evident that the company would face strong competitors who were present in the market for quite some time. In such situation, the company needs to make sure that pricing and quality of products strategized in such a way that it becomes popular among the customers and the company consolidates its position in the new markets.
The demography also plays significant role in deciding the marketing and sales policies. It is necessary for the company to realize the fact that it is the culture and demography of Asia is different from that of Australia in many ways. Therefore, it is necessary for the company to make modifications in its production units so that it is able to fulfil the demands of the customers irrespective of the cultural and demographical changes.
Despite of the different adversities and difficulties, the company has significant scope of growth. That is because despite of competition that the company faces, it has the scope of introducing new designs and new techniques of productions. This is a great way to grab the attention of the customers. The company also needs to focus on the corporate social responsibility in the new markets to make its impact in the new countries. This would help the company to gain popularity and fame in the countries and become popular among the people.
Finally, the company needs to focus on the 4Ps of marketing. The 4Ps are products, prices, people and promotions. With the proper and strategic operations, it would be possible for the company to gain the market and improve the sales.
Through the study, the company was able to explore the different factors that would affect the growth of a company. With the help of this study, the researcher was able to explore the facts that have direct impact on the operations of a company that is planning to expand its business. This study also helped to understand how it is possible to explore new markets and place the products strategically so that a company is able to perform good business on a global scale. On the concluding note, it can be said that the study provided an in depth idea of how to carry out retail internationalization based on the different factors.
In personal views, it can be stated that several conflicts are generated between management and employees during the expansion process. The employees resist new changes. Moreover, in internationalization the employees are shifted to new positions, which creates conflicts among them. In order to mitigate these conflicts, the companies need to have a clear and transparent communication medium. Transparent communication will decrease the doubts and ambiguity regarding different situations. In addition to it, the conflict situations can be addressed through negotiation methods. The management should try to satisfy the concern of both the sides by listening to both the parties. The suggestion proposed should be able to satisfy the concern of both parties. The human resource manager should create a positive and enthusiastic work culture or environment within the organization. In multinational organizations, the cross-culture communication is another significant issue (Salacuse, 2004). Therefore, it is important to provide cross-culture training before sending corporate employees in different countries. They should acknowledge that it is important to accept and respect the cultures and customs of different countries.
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