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Each group will do a Global Business Report on a company of their choice that is specifically entering or developing within an international market addressing the key themes of the Global Business module. Ideally choose a company that has the potential to enter an international market or, if having already internationalised, has the interest in entering another region / market. Students should consider the four risks of internationalisation; evaluation of the different entry strategies and justification for the proposed entry strategy; and other management considerations. The company selected does not need to be approved by your lecturer. However, each team should include a statement in the appendices of their report specifying that they have not used this company for any other module project. At the end of the report, a section should be included whereby each team member inserts a brief description about his or her contribution to the group assignment.

This assignment assesses the following learning outcomes of this module:

  • Application of theoretical concepts of Global Business;
  • Critically appraise the theoretical underpinnings of Global Business;
  • Understand the different issues and challenges business face when they operate in a global environment;
  • Examine the cultural, political and legal issues that impact global business development;
  • Evaluate the strategic options available to firms to develop global businesses and assess the internal and external factors affecting the decision.

All members must equally participate in their group project. Please alert the programme manager in the event that a team member is not equally contributing to the group. Your final submission must also include a detailed log of all your team meetings, detailing the roles of each of the team members in each of the meetings, as well as a breakdown of responsibilities for the final report, this must be signed by all members of the group (this is to be included in the appendices).

Structure of the Global Business Report

  1. Title Page - project title, module, group members (include all student numbers and names), lecturer’s name, subject and date.
  2. Executive Summary: The content of this section should not include any company history. The purpose of the executive summary is to inform the reader of the key facts from your analysis. This should be one page in length.
  3. Table of Contents – each section, sub-section and corresponding page numbers
  4. Introduction – tells the reader what the project report is about, the project aims and outlines the process to achieve these aims.
  5. Main Body of Report – this requires a clear overview of the issues facing the company as well as an in-depth analysis.
  6. Recommendations - This should be based on your in-depth analysis and requires you to demonstrate your ability to apply key knowledge. This is the most important section to show your comprehension and ability to think strategically. You must critically evaluate all your research in the above sections and make specific recommendations and justify the reasons for those recommendations.
Company Overview

Global business is the international trade where the organisations do the business across the globe. Globalisation plays an important role for the organisations doing the business in the international market and the organisations get economic benefits when they free up the international trade across the world. As stated by Jones and Kierzknwski (2018), internationalisation is applied to the multinational organisations which shift their assets between the subsidiaries across the borders. Global business can be done by producing the products in the domestic market; however, the business organisations can export the products to the foreign markets. In this report, Mash-Up, a fashion brand in Singapore is chosen to show the opportunity and strategy of the global business. In this report, the chance of Mash-Up to expand the business in New Zealand is explained. Four risks of internationalisation along with an evaluation of different entry strategies are discussed. Moreover, in the final section of the report, justification of the proposed entry strategy is explained by other managerial considerations. In this report, segmentation, targeting and the positioning strategies are discussed of Mash-Up to expand the business in New Zealand. Most importantly, marketing mix of Mash-Up is described to discuss the marketing strategies.

Mash-Up is an independent fashion collective brand that establishes a fun and bold wearable objects with references to pop-culture. Mash-Up was established in the year 2012 and it collaborated with many of the international brands like Topshop, Uniqlo, GAP, Lomography and Onitsuka. Mash-Up made a partnership with international players to organise Digital Fashion Week in Bangkok and Parco Shibuya. Mash-Up is based on tropical Singapore and this brand is famous for playful nature and DIY aesthetic which attract the loyal followers of enthusiastic fans and supporters. Mash-Up hosts of many of the club nights where the women, men and kids come together for the good time (Mashupcollective.com 2018). Mash-Up mainly sells the fashion clothing products like men and women shorts, t-shirts, funky bedroom dress, women top, oversize T-shirts, shorts and pants. In addition, kids' clothing is also available in the stores of Mash-Up. Mash-Up started its journey from Singapore and Mash-Up has currently stored in Malaysia, Singapore, Indonesia and Thailand.

New Zealand belongs to the OECD high-income group and GNI per-capita in New Zealand is US$ 39,070. World Bank provides rank one to New Zealand in ‘ease of doing businesses’ and starting a business is very easier in New Zealand. New Zealand is efficient to help the multinational companies to conduct the business and New Zealand offers market-oriented economy that delivers the key benefits to the investors (Kelsey 2015). New Zealand provides the companies stability and various free-trade agreements. New Zealand government provides support to the investors and New Zealand provides the highly educated, flexible and multi-skilled workforce. In addition, New Zealand provides the secure and stable economy with modern infrastructure along with robust and sophisticated telecommunication services. New Zealand gives free circulation of the capital, and it gives simple taxation rates as well. Finally, New Zealand has strong point of giving the 100% tax deductibility for the corporate research and development to Mash-Up. New Zealand is the 7th on the OECD’s Better Life Index where the customers’ purchasing power will be much better (Newzealanadnow.govt.nz 2018).

Opportunity and Strategy in New Zealand

Political condition of New Zealand is stable and the politics of New Zealand follows the framework of unitary parliamentary representative democracy. New Zealand was ranked in the year 2016, the world’s third most stable country (Zalengera et al. 2015). New Zealand also ranks comfortably among the top ten countries in the world which follow the rule and regulation, as stated by World Justice Project. The political condition of New Zealand is stable and the country was ranked second in Global Peace Index in the year 2017 as the people can feel safe to live. In case of doing the business, the government provides help to the foreign companies and Transparency International Corruption Perception Index provided New Zealand with number one position after measuring the good functioning of the public institutions and trustworthiness of them.

The economic condition of New Zealand has been developing and New Zealand has an open economy as it works in the free market principle. For the last 30 years, New Zealand has gone from being the most regulated OECD country to the free market economy. GDP rank of New Zealand is 53rd and the current GDP is US$186.4 billion. GDP growth of New Zealand is 3.5% and the inflation rate in New Zealand touches the 1% (Mendes 2017). Labour force of New Zealand covers the 2.399 million; therefore, the foreign companies can have the educated labour force in New Zealand. FDI inflows broke the record in New Zealand as FDI exceeded USD 3.5 billion in the year 2017 in New Zealand.

Foreign Direct Investment

2014

2015

2016

FDI inward flow (million USD)

2,528

-337

2,293

FDI stock

76,712

66,838

70,085

FDI inward (%)

5.8

-0.98

5.3

FDI stock

38.6

38.7

38.5

Table: Foreign direct investment

(Source: En.portal.santandertrade.com 2018)

Annual retail sales of fashion in New Zealand touched US$3.3 billion and the annual expenditure of the people of New Zealand in fashion clothing has been increased (O’Cass and Muller 2017). The average household net-adjusted disposable income-per-capita is lower than OECD average in New Zealand.

The socio-culture condition of New Zealand shows that New Zealand people are mainly hard working. The people like to spend time with the family as they always make the work-life balance. In addition, Maori people live in New Zealand and national language of Maori people is Tonga and almost 23% people speak in this language (Fashionunited.nz 2018). Of late, New Zealand people prefer the western outfit. The preference of the people in New Zealand is changing with the time and the fashion trend of New Zealand shows the preference towards Trans-seasonal fashion, velvet and sheer layers. New Zealand people are habituated with 40 hours week and minimum wage in New Zealand is NZD2, 253 per month (Spoonley 2015).

Market Analysis of New Zealand

Technological development in New Zealand is vivid as the technology is the fastest growing sector to support the various industries in New Zealand. The technology sector in New Zealand is worth more than $6 billion and the exports have doubled in past three years. In the fashion industry, New Zealand mainly believes in the clean transportation of the fashion clothing and raw materials and replaced energy should be used with renewable sources. In addition, internet usage has been increased in New Zealand that would help the companies to start the marketing with Smartphone commerce. Almost 87% adult people in New Zealand use the internet at their homes and in Smartphone (Murray 2017). In New Zealand, 3D printing in fashion is in vogue and most of the fashion companies are organising the fashion shows along with the tech events.

The legal environment in business in New Zealand is regulated by the Ministry of Business, Innovation and Employment. This agency develops different regulation regarding the capital and financial market as well as market intermediaries. Foreign investment is welcomed in New Zealand and it is encouraged without any discrimination. The country exposes the minimum corruption and New Zealand provides transparent and open economy where the companies and investors can make commercial transaction. New Zealand has been expanding the bilateral treaties with many of the countries so that New Zealand can have free trade agreements. New Zealand also has the strong legal framework and the judicial system to uphold the sanctity of the contracts. New Zealand has made closer economic partnership with Singapore (ANZSCEP) and it is the first bilateral agreement between these two countries. The companies have to pay Good and Service Taxes and the rate of tax is 15% (Collins et al. 2017). Corporate tax rate is 28% and capital gains are generally non-taxed.

Environmental practices in New Zealand became more integrated in the 1980s after passing the Environment Act 1986. New Zealand government has also passed the Conservation Act 1987. The organisations of New Zealand believe in sustainable efficient management that can co-lead the energy efficient working process. The organisations need to work to manage the water, waste and geothermal as well as the biodiversity. The organisations in New Zealand have to follow the Resource Management Act 1991.  

Strategic risks

Strategic risk is the process performed by the organisation for recognising, managing and assessing the risks and uncertainties affected by the external and internal events. The senior management are challenged to assist their companies addressing the new strategic and operational compliance related to the international growth of the organisation. The strategic power can affect the intensity of the organisation. When an organisation enters the foreign land, the organisation might face the marketing risk and the competitive risk (Perlmutter 2017). The organisations need to do the marketing research before the organisations take the strategic decision regarding the marketing. In addition, the firms can take the business innovation while expanding the business. The innovation strategy might not work for the firms in the new market. These strategic risks can harm the business’ sustainability. Mash-Up can face the issue of strategic decision to respond to the forces and this force may impact on the competitiveness of the organisation. In addition, Mash-Up can also face the issue of cross-cultural risks when they will open the offices and outlets in New Zealand. The cultural miscommunication can put the human value at stake as the differences between the religion, language, lifestyles; customs and mindset are all different.

Political Conditions in New Zealand

Operational risk is undertaken by the organisations when the organisation attempts to operate within the industry. As stated by Cavusgil et al. (2014), operational risks are not inherent in the market-wide risks, financial risks. Operational risk is associated financing and systematic risks which include the risks resulting from the breakdown of the internal procedures, system and people. In international business, the organisations can face breakdown of the supply and demand, machinery, shortfall of goods and services, inventory inefficiency and the service lacks the perfect logistics. The management of the international business may face the issue and risks of the production and controlling cost, unnecessary waste management and it may contribute to the efficiency in globalisation. Mash-up organisation can face the operational issues like distribution, logistics and inventory in New Zealand. After opening the outlets in New Zealand, Mash-Up can face the issue of controlling the costs and process improvement. The supply and demand for the products and resources can problems for the organisations Mash-Up.

When an organisation enters the new country; the organisations might face the issue of profitability and operations by the factors of new country's economic, social and political condition. In addition, the government's intervention, protectionism, lack of legal safeguards and barriers to trade can impact the organisation (Feenstra 2015). Country risks are associated with the difficulty when the multinational companies operate in different market where the people believe in another culture and they belong from multiethnic backgrounds. In order to operate in safe and in efficient manner; the organisations change some basic corporate government rules. The organisations may also face the issue of government rules in different countries, security issues and political conditions. Mash-Up may face the issue of dealing with construction permit as there are six procedures to obtain the construction permit in New Zealand. It takes almost 89 days in total to receive the building and resource consent. Registering property in New Zealand contains two steps as the first step is associated with the obtaining the land information and registering the property. In addition, Mash-Up can face the issue of getting the credit and protecting the investors. In New Zealand, the financial service sector is robust and it has the strong regulatory environment. Finally, paying taxes to New Zealand is quite time consuming; such taxes are the Accident Compensation Corporation levy, VAT returns as these days 100 days combined.

The organisation can face the issue of adverse fluctuations of the economic condition, and the issue of exchange rates. Currency exposure, foreign taxation, assets valuation and inflationary pricing can cause the issue for the organisation. The risk of engaging the international business is associated with the exchange rates and the customers pay the business in different currency. Foreign exchange market mainly stable and the organisation invests huge amount of money in expanding the business. International transaction needs extra precaution about the payment of the money. The organisations face the issue of credit insurance and it can alleviate risk of selling the products. Most nations make it troublesome for remote firms to repatriate finances along these lines driving these organizations to contribute its assets at a less ideal level. In some cases, firms' advantages are seized and that adds to monetary misfortunes (Tradestart.ca 2018). Mash-Up can face the issue of foreign exchange risks when the value of investment will fluctuate due to the alteration in the currency exchange rate between New Zealand and Singapore. Foreign currency is volatile in nature for the exchange rate and it can be difficult to protect the risks against the harm of sales and revenues.

Economic Conditions in New Zealand

Resource-based view is the approach to achieve the competitive advantage of the organisations. This concept focuses on the resources of the firms and resources can help the forms to achieve the sustained competitive advantage. Resource-based view helps to select the strategy for competitive position which exploits the internal resources as well as capabilities to the external opportunities. Firms can adopt many of the possible competitive positions. Resources are all assets, organisational process, capabilities and firm’s attributes, knowledge and information controlled by the organisation which enables the organisations which enable the forms to formulate and implement the strategies of the organisation to develop its effectiveness and efficiency (Lin and Wu 2014).

Institution-based view strategy is the outcome of the consideration of both streams of research in the context of the business strategy. Institution-based view conceives the strategic choices as the outcome of the dynamic interaction between the formal and informal intuitional environment and the organisation. Formal institutions are the regulations and the laws, on the other side, informal institutions are the cognitions and norms as these can be termed as background condition. As stated by Peng (2016), the institution-based view is positioned as one leg that assists sustain the strategy tripod and the other two legs are the industry and resource-based views. Institution can be defined as the humanly devised constraints and it can structure the human interaction. Institution-based view captures the complex and the rapidly changing relationship between the environments and the organisation's emerging economies. Strategic choices of the organisations are just not only driven by the situation of the industry and the capabilities of the firm; these are also reflection of the formal and informal constraints. Organisations directly determine to formulate and implement the strategy to have the competitive advantage. 

6.2 Resources of Mash-Up

Tangible Resources

Financial resources

Mash-Up has the borrowing capacity and the firm has the ability to generate the internal funds. Business funds of the organisation are large and the cash equivalents and corporate capital are also large. The organisation earns the financial resources by selling of the products. Organisation's total assets equal to the equity capital and the liability. Total revenue of the organisation at present US$23 million. The foreign capital of the organisation as large as this organisation has its stores in Malaysia, Thailand and Indonesia.

Organisational resources

Mash-Up has the organisational resources including the inventory, production resources and the information technology. Mash-Up manufactures the streetwear in Singapore and the organisation has the formal reporting structure. The formal planning, coordination system and controlling of the human resources are all associated with this.

Physical resources

Physical resources of Mash-Up are associated with office building and the production equipment. The organisation has its office building in Singapore and the outlets are located five locations in Singapore. The physical shops are located in Malaysia, Thailand and Indonesia.

Technological Resources

Technological resources of Mash-Up are mainly related to the website and the third party patch up through which the organisation sells the clothing to the customers online. Stock calculation technology, supply chain technology and trade secret technology all are related to this.

Intangible resources

Human resources

Mash-Up employs more than 1200 employees in Singapore and Malaysia. The employees work in Mash-Up outlets and the offices where they manage the online orders as well. The knowledge of the employees and their trust and managerial capabilities are important. The human resources of the organisation follow the organisational routines.

Innovation resources

Mash-up organisation is famous for the fashion innovation as the organisation spends money in the idea generation and the capacity to innovate. The management develops the scientific capability of the organisation. Mash-Up is famous for the innovation in fashion as the fashion clothes of Mash-Up are designed featuring the tongue-in-cheek references. The pop culture references and revolution are some of the key themes of the organisation.

Reputation resources

In Singapore, Mash-Up is mainly famous for the new fashion trend and the brand name is famous among the women and teenagers. The organisation has reputation among the suppliers and the supportive, effective and efficient interactions can increase the reputation in the industry. Since 2012, Mash-Up has started collaboration in lifestyle brands like GAP, Uniqlo, TopShot and Pioneer.

Table 2: Resources of Mash-Up

(Source: Self-developed)

Core-Competency of Mash-Up

As stated by Hitt et al. (2016), core-competency is the harmonised combination of various types of resources and the skills which can distinguish the organisations in the marketplace. Core competency is the foundation of the companies' competitiveness. Core competitiveness mainly fulfils three criteria as it provides the potential access towards the wide variety of the market and organisation should make the good contribution towards the perceived benefits of the customers, lastly, other organisations cannot imitate the competitors. Mash-Up has the core competency as it is the independent fashion collective which creates the fun and bold wearable for the women and teenage people. The core competency is the brand value and the organisation has the attracted loyal customer base in Singapore.

Socio-Cultural Conditions in New Zealand

According to Barney (2014), organisational capability is the organisation’s ability to manage the resources through the employees' promptness and to gain the advantage over competitors. The capability of the organisation is the ability to perform better than the existing competitors using the resources which are difficult to replicate. Capabilities of Mash-Up are the fashion collective and the fashion trends are the pop-culture and the revolution of everything in between. 

VRIO analysis

Value chain

Capability

Tangible resources

Intangible resources

Valuable

Resource

Inimitability

Organisation

Sustained competitive advantage

IB

Product design engineering

Financial perfect

Knowledge

?

?

?

X

Yes

Operation

Financial

?

?

?

No

OB

Distribution management

Financial distributor

Reputation network relationship

X

?

?

?

Yes

Marketing sales

Channel management and marketing management

Financial

Reputation

?

X

?

?

Yes

No

Services

Financial

?

X

?

X

No

Valuable facilities

Modern manufacturing equipment

X

X

?

?

Yes

Table 3: VRIO framework

(Source: Self-developed)

The organisations must understand specific market needs and specific business cultures and practices. Business needs and cultures in other countries really are different. The organisations must be intensely and very keenly aware of them in every market approach. The executives need to learn the history of market entry timelines in each country approach. The organisation must be sure production can meet new demand, but only after long and objective study of the country’s market for the products. The organisations must be willing to be very patient, spending money as if it was organisations’ own and not somebody else's (Low 2016). Garnering trust and showing respect on both sides, with all the relationship-building that earns that should be considered paramount.

Direct exporting is about selling the products directly into the market in the first instance with the own resources. Most of the companies establish the sales programme to the distributors or the agents to show them further in the market. Distributors and the agents work closely for the organisation and the agents become face of the organisation in the foreign land. Direct exporting organisation can handle the newly recruited employees. As stated by McGovern (2018), the organisations are responsible for handling market research, logistics, invoicing and the foreign distribution. The organisation gains the potential profit as the organisation is eliminating the intermediaries. In fashion clothing, the organisation may have the greater control in all aspect of distribution and the fashion clothing brand will know the customers as well. Direct exporting provides the protection to the trademark, copyrights and patents.

Through license, the organisations transfer the rights of doing business to another owner and the new ownership can sell the services and products. This strategy is useful as the purchaser of the new license can have the large market share. The foreign businesses can convince the organisations to have the license to sell the products. Licenses can be for promoting or for the manufacturing of the products. Issuing the license provides guaranteed and instant revenue and license agreement need various types of variable payment as well. According to Dodgson (2018), the license of doing the business in the foreign market provides the brand recognition as it considers the retaining the right market. The license of doing the business gives the recognition in the foreign market and credibility of doing the business. For fashion clothing organisations, licensing companies can limit the competition; however, the license may provide the boundary of with the organisation containing quantity, time or the geographic restriction as well.

Technological Conditions in New Zealand

Franchising process is North American style of rapid expansion of the business and it can gain traction of the business in another part of the world. Franchising is the repeatable business model where the owner of the business gives the permission to some individuals to do the business with the name of the brand. The owner of the business must have the unique or strong brand recognition which can be used in international perspective and another way of franchising is to create the future competition of the franchisee. Giving the franchise is the fastest way to expand the business. According to Knight (2015), franchise lowers the risk of business failure as it spreads the business in a different geographic area very fast. The franchisee may have limited risk as the services and the products have already established in the market. For a fashion brand, the franchise mode of entry makes the brand name famous and it enables the firm to compete with the big business. On the contrary, the franchise agreement includes the restriction and all the profits are shared with the franchise holders.

Mostly in Asia, partnership of the business is necessary to enter the foreign market. Partnership is the co-partnership arrangement of the firm as it is the sophisticated strategic alliance for manufacturing of the products. Partnering is the useful strategy in the industry where the business culture and society both are important (Tradestart.ca 2018). The partner of the business can have the local market knowledge which will help the foreign brand to expand the business. The advantage of the partnership is that it is easy to establish the business in the different market as the starting of the business is low. The business venture has the more capital and the organisation has the greater borrowing capacity. On the other hand, the disadvantage of the partnership business is the liability of the partners for the debts of the business is unlimited. The partnership business can face the risk of disagreement among the partners and management.

Joint venture is one type of partnership which involves the creation of the third independently controlled company. In this case, two companies do the agreement to work together in an industry to create the third company. Risks and profit of the organisation can normally shared equally by the organisations. Helfat and Peteraf (2015) commented that joint venture gives the new insight and expertise along with the better resources with technology and staffs. The joint venture for the fashion brand is a temporary agreement between the companies. In addition, joint venture provides the advantage of share the costs and risks. Joint venture plan of expanding the business can be flexible (Birkinshaw et al. 2016).

Legal Environment in New Zealand

Large multinational companies can buy an existing local organisation to enter new market. The large companies want to buy the existing company may be because the local existing companies have the market share. When a foreign business buys the existing company in the new market; the foreign brand gets the market share and the direct competitors. In some cases, due to the government policies; the organisation cannot buy the existing local companies and they have to purchase a share of this. Before making purchase of the local companies; they organisation needs to research about the local companies (Spoonley 2015). The existing management and employees of the local companies have the local market knowledge. Fashion brands will face surely the most expensive mode of entry and decide the genuine estimation in a different market will require generous due tirelessness. For a fashion brand Mash-Up, the organisation will get benefit of having local fashion trend and an established customer base.

Turnkey ventures are specific to organisations that give administrations, for example, design, development and building or environmental counselling. A turnkey venture is a place the office is developed from the beginning swung over to the customer prepared to go, turn the key and the plant is operational. Turnkey project is a decent method to enter remote markets as the customer is typically an administration and regularly the venture is being financed by a global budgetary organisation (Flew 2018). This type of entry strategy will be feasible for the large project and for the large multinational companies which will have the projects and agreements with the government. The customers or clients of the organisations will be the government and the projects are financed by the international financial agencies.

Mash-Up has its outlets in Singapore and headquarters of the organisation is situated in Singapore as well. Mash-Up will export the fashion clothing for men, teenage and women to New Zealand as the organisation is not going to make any manufacturing unit in New Zealand. Therefore, Mash-Up will export the product from Singapore to New Zealand. The organisation will get a rebate as there is a free-trade agreement between these two nations. In order to expand the business to New Zealand, the market entry strategy will be franchising. The exporting of the products to New Zealand will help Mash-Up to send the products to the respective outlets. Without taking the franchising strategy, the firm will not be able to reach large numbers of customers. Franchising is a kind of business relationship in which the franchisor gives to independent people the right to enter the market and sells the franchisor products and to use the business name for the fixed period (Wu 2015). Franchising allows the franchisor to make relationship among the several independent businesses in order to reach the same objectives of keeping the customers under the established brand. Mash-Up can give the franchise to five individuals who can sell Mash-Up products to five different metropolitan cities, Auckland, Hamilton, Wellington, Napier and Christchurch. Therefore, imported products from Singapore will be sold in the franchise outlets in five different cities. Franchising strategy will be appropriate for Mash-Up as it will allow the business to reach a large section of customers easily. Customers of five different cities will get to know about Mash-Up. Franchising strategy will help Mash-Up to have a cost-effective expansion of the business and it will not bother Mash-Up to spend a large amount of capital. Mash-Up will just import the products and use the best supply chain. Mash-Up will have marketing support which will eliminate the costly guesswork of the marketing as the franchise will be local people with adequate market knowledge.

Environmental Practices in New Zealand

Mash-Up is going to start the franchising and most of these needs of the organisation involve people. The organisation needs executives to handle the franchising market, placement of the advertisements and tracking of the advertising. Mash-Up should train and support the five franchises in five different cities. Mash-Up needs to employ one senior executive to manage the franchising system and to train the franchise and to manage the advertising fund. The senior executive must be public relation pro and the people must ensure to give the quality control. Mash-Up will send one senior executive from Singapore to New Zealand and the senior executives will make a team of people to manage the overall franchising system. The team will have 4 members and all the new hiring will be made in New Zealand.

At first, the team of four members and the senior executives will research the fashion industry in New Zealand. Mash-up team will send application forms to the public. Interested franchisee persons will contact with Mash-Up and the franchisee persons will submit the application sheet. Mash-Up will review the disclosure documents and they will develop the questions for the franchise. The team will also visit the franchisees so that they can ensure Mash-Up stores will be in place in five different cities in New Zealand. The franchisees need to choose the potential place to open the stores. The team needs to ensure the stores must have the grand opening so that the people living near the place would know about Mash-Up. Mash-Up team will arrange the training sessions for franchisees.

Segmentation: 

Segmentation

Elements

Description

Geographic

Location, Region

Mash-Up can segregate geographic regions according to the five different cities

Demographic

Age, gender, occupation, socio-economic group

Mash-Up will segregate this segmentation according to the socio-economic group as the fashion clothing of Mash-Up is costly than average fashion brands

Behavioural

The rate of usage, benefit sought, loyalty status, readiness to purchase

This market can be divided based on value for money impulse buy

Psychographic

Personality, lifestyle, attitude, class

This market can be divided based on customers who like to purchase funky looks, pop culture and odd coloured fashion clothing.

Table 4: Proposed market segmentation of Mash-Up

(Source: Self-developed)

Primary target customers of Mash-Up in New Zealand will be niche customers who belong to upper-middle-class people. Upper-middle-class people can afford the premium pricing clothing and the trends of the offered clothes are slight off-beat. The customers belong to the upper-middle-class people can relate to the products of Mash-Up and they can pay for the fashion clothes also. Therefore, young generation who belong from upper-class socio-economic culture will be the target market for Mash-Up.

Product: Mash-Up will provide teenage, men, women and kids fashion clothes for people living in New Zealand. Mash-Up will offer grey bedroom tee, notebook shirt, dairy queen tee, breakfast oversized tee, divided tee for men. Mash-Up will offer breakfast club swim, midi dress and club t-shirt for the women and teenagers. Therefore, Mash-Up is going to take the diversified product line strategy in New Zealand based outlets.

Strategic Risk in Internationalization

Price: Mash-Up will take the premium pricing strategy in New Zealand to increase the brand awareness of the organisation. Higher pricing helps to gain high-profit margin from the market.

Place: Mash-Up will do the importing of the products from Singapore. The products will be sent using the own distribution channel to the five outlets in five different cities in New Zealand.

Promotion: Mash-Up will do promotion of the business through social networking sites like Instagram, Facebook and Twitter. In addition, the organisation will use SEO and PPC to increase the website visit. Mash-Up will use the print media to let the customers know about the organisation.

Conclusions

It has been observed that international marketing is lucrative for the small business when they enter the new market with the existing product line. Mash-Up sells the funky and pop culture type fashion clothes to the customers and it is Singapore based organisation. Mash-Up can expand the business to New Zealand as New Zealand will be the best choice for Mash-Up. New Zealand ranks one in ‘ease of doing businesses' and the economic condition of New Zealand is stable. The business infrastructure of New Zealand is very impressive and the organisation can face the issues of risk in internationalisation in shape of country risk, strategic risk, cultural risk and financial risks. The resource-based view of Mash-Up has been reviewed and it is clear that resources of Mash-Up will help the organisation to expand the business in the different region. VRIO framework of Mash-Up makes clear that the organisation will have the competitive advantage through fashion sense. After evaluating all the relevant market entry modes, Mash-Up can take the franchising market entry as franchising will provide an easy entry in New Zealand within no time to many of the places. Mash-Up will make a team that will train the franchisees to operate the business. Mash-Up will take the premium pricing strategy and digital promotion in order to attract the customers in New Zealand.

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