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Introduction
Harrods presently operates in the UKs retail and fashion sectors. Charles Henry Harrods began the company in 1849. The firm has grown significantly to become a successful brand in the country. It presently provides luxury products to its customers. Its store occupies a site of around five acres along Brompton Road. The time appears right for Harrods to expand its operations.
Global Trading Environment
Strategic thinking encompasses identifying existing opportunities and applying organizational strengths to introduce new changes. Harrods has a strong background, competitive products and services, and a desirable brand image (Bratton, 2020). The globe has numerous markets that can help Harrods improve its business performance and become more profitable. However, the move to expand operations is timely and capable of taking Harrods closer to its business aims. The leaders at Harrods should also consider these forces: exchange rate, globalization, outsourcing, operational costs, and existing laws.
International Market Research
International market research is essential for Harrods to learn more about the targeted market. The study will highlight the PESTEL attributes associated with the country of entry. The investigators will examine the accessibility of the identified market, peoples behaviors regarding luxury products, and income levels (Adams et al., 2021). The process will also highlight the legislation and legal forces in the country. These insights will help formulate the best strategy for entering the identified market and eventually recorded the needed gains.
Techniques and Selected City
China is a populous country, a strong indicator of positive gains in the market. The rationale behind selecting Asia is that it has some big cities with increasing number of possible customers. Majority of the people have high disposable income rates and desire for luxury goods and services (Ajagunna, 2019). These attributes will ensure that Harrods pursues this venture successfully.
Possible Locations
The identified foreign countries for the company to invest include Taiwan, Japan, and China. Specifically, the cities taken into consideration include Taipei City, Beijing, and Tokyo. These locations have unique attributes and opportunities for Harrods to capitalize on.
Market Research on Locations
This presentation reveals that Beijing, China, appears to be more accessible and capable of delivering increased profits. These outcomes are possible due to the citys population and the promoted government policies. While Taipei City is accessible, the population associated with it delivers a small market size, thereby reducing chances of recording increased profits. While Japans Tokyo has a bigger population and accessible, the level of profitability could be lower. This possible since the country promotes companies operating in the automobile and electronics sectors (Rethel, 2018). Foreign companies in the fashion industry could find it hard to attract more customers, thereby recording reduced sales and profits. These attributes reveal that Beijing is the most appropriate choice.
Beijing, China
China presents unique cultural attributes capable of supporting Harrods and ensuring that timely outcomes are recorded. The people of Beijing are keen for aesthetics, quality, and positive experience. The company would need to consider the income levels of the targeted clients. A proper management of language issues and cultural issues can help deliver the targeted goals.
Culture of China
Based on the presented cultural attributes of China, it is evident that the country has a high literacy level of around 96.8 percent (Lau and Zipser, 2019). The people are religious and take issues of environmental sustainability seriously. The use of English and Mandarin can help Harrods to invest in the country more efficiently.
Additional Analysis: Beijing
Chinas Beijing forms the best choice for doing business due to the higher income rate of 75,000 Yuan (Lau and Zipser, 2019). The current population of over 21 million citizens makes it a favourable destination (Lau and Zipser, 2019). Within the country lacking services similar to those of Harrods, the approach would be focusing on a latent market. This approach is plausible since it will attract more potential customers (Lau and Zipser, 2019). The business will consider the family dynamics, cultural attributes, and personal goals.
Business Expansion
The analyzed forces reveal that Harrods has a chance in the Chinese market. The analysis reveals that the threat of entry from newcomers remains extremely low. The bargaining powers of buyers and suppliers remain average due to the emerging consumer society and the present of agile supply chain systems (Jin and Shin, 2020). The threat of substitutes capable of matching British standards associated with Harrods remains extremely low.
Strategic Direction: Ansoff Matrix
While this model offers a detailed approach for new entry, Harrods need to focus primarily on market development. While relying on the current offerings and products, this firm needs to identify the best location in China (James, 2020). It can identify specific products to attract more customers.
Target Market and Positioning
Efficient branding strategies are needed to meet Harrods goals in the Chinese market. The company need to use celebrities while maintaining the highest level of quality (Branco, 2021). Some items or products could be personalized depending on the diverse needs of the targeted Chinese customers. Proper positioning is essential to identify the best region or location for launching the venture (Harrods, 2017). The proposed entry is that of direct exports to meet the demands of more customers in China. The branding efforts will present powerful products that deliver British quality while allowing more customers to achieve their goals (Javornik et al., 2021). This model of entry will help deliver positive results in a timely manner.
Standardizing Marketing Mix
The selected market is capable of presenting unique challenges to this company. Despite the positive performance in the UK market, the Chinese environment could pose a number of challenges associated to the countrys cultural and social attributes. The marketing mix model needs to integrate competitive and low prices depending on the interests of the customers (Mogaji, 2021). The promotional aspect could feature Chinese celebrities and artists. The products could be redesigned or expanded by including attributes favourable to Chinese clients (Laig and Abocejo, 2021). The place of choice should be easily accessible and capable of supporting performance.
Marketing Communication: Promotion
To achieve the intended promotional goals, Harrods need to adopt a multifaceted approach. This will include the integration of traditional forms of advertising, such as television, radio, and newspapers, with social media platforms (Lawri, 2021). Messages need to be culturally sensitive and in accordance with the expectations of the customers (Bratton, 2020). Celebrities from China would help support product endorsement.
Implications and Expansion
Harrods needs to promote environmental protection and social attributes of the people (Hanbury, 2020). Advertising laws and requirements need to be followed (Schmitt, Rossi and Bensoussan, 2022). The presence of a stable environment for doing business and the power of technologies can help Harrods pursue its business goals diligently. The PESTEL analysis reveals that China is an attractive destination for foreign investment. The government has opened its borders, thereby allowing companies from elsewhere to do business locally (Richards-Carpenter, 2017). The issues of concern revolve around ethical and environmental concerns (Hon et al., 2020). The business laws existing in this country compel business entities to engage in proper advertising while safeguarding the nations interests.
Recommendations
The fact that Harrods has a superior brand name is capable of delivering positive results. The direct exporting strategy appears workable for this firm. The establishment of an effective team will help manage operations and consider existing ethical, social, and legal requirements. Upon entry, the elements of 4P would need to guide most of strategies (Patel and Husairi, 2018). The idea of continuous improvement is essential to redesign marketing processes and introduce features that resonate with the people in the selected market.
Conclusion
The fact that Harrods is a reputable brand name makes it profitable in the UK market. The move to enter the Chinese market is recommendable since the region has more customers, proper policies, and attractive social forces. The company needs a competent team of experts to support the foreign entry strategy.
References
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Ajagunna, F.E. (2019) The impacts of branding and shopping experience on consumers in luxury retail: a comparative study with reference to Harrods and Selfridges. Web.
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Bottar, J. (2021) Qatars Harrods owner lines up for £4bn Selfridges auction. Web.
Branco, A.L.P.C. (2021). Exploring the benefits of digital-native e-tailers expanding their presence offline. Web.
Bratton, J. (2020) Organizational leadership. London: Sage Publications.
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Hon, C. et al. (2020) Digital transformation at Harrods, Frontiers in Economics and Management, 1(9), pp. 44-51.
Hanbury, M. (2020) Harrods, the iconic luxury department store. Is cutting nearly 700 jobs after struggling during the COVID19 pandemic. Web.
Laig, R.B.D. and Abocejo, F.T. (2021) Change management process in a mining company: Kotters 8-step change model, Organization, 5(3), pp. 31-50.
James, E. (2020) STOR WARS Harrods is axing up to 700 Staff with 14 percent of workforce being made redundant in wake of coronavirus pandemic. Web.
Javornik, A. et al. (2021) Strategic Approaches to Augmented Reality Deployment by Luxury Brands, Journal of Business Research, 136(6), pp. 284-292.
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