BUSM9032M Understanding International Business Assignment Sample
Here’s the best sample of BUSM9032M Understanding International Business Assignment, written by the expert.
Company Background
Gucci is an Italian luxury fashion house based in Florence. Gucci was founded by famous fashion house in Florence, Italy in 1921 as Gucci label. Its deals in product line including handbags, ready-to-wear, footwear and accessories, makeup, fragrances and home decoration etc (Gucci, 2021).
Gucci contains 520 stores in across the globe as it currently operates in 207 stores in Emerging countries worldwide while 106 stores in western developed European countries. It majorly operates as a luxury brand where high-income people or celebrities are targeted. Its products are more expensive than average due to which it struggled a lot in few markets. It is must to evaluate the brand strength, weakness, opportunities and threats (see in appendix-1) for provide foreign market expansion in more emerging markets which is still uncovered by Gucci.
Issues/Factors are significant for the company in terms of foreign market expansion
As per SWOT analysis tool, it can be stated that emerging market like India, China, Brazil are the ones that Gucci need to focus properly for its luxury products by targeting youngster through its latest fashion innovations. In respect to international expansion, Gucci must to analysis of market entry strategies. There are few issues that could influences Gucci and these are as follows: –
Product Development: – Since the region of Italy where Gucci emerged then it has its majorly manufacturing unit or designers of European countries. In that case, it become quite difficult for Gucci designers to design the products as per the Asian people (Tokatli, 2013). The limitation regards to skilled workforces or advanced technology and many more areas could restrict the brand plan to start-up manufacturing unit in India.
Financial condition: – Gucci is luxury brand which don’t compromise in quality or costing. In that case, Indian customer are price-sensitive. It could influence brand to get proper acceptances.
R&D: – Gucci for emerging market entry requires proper research & development about the people taste and preferences. The absences of proper R&D could influence their sustainability in emerging market (Wang, 2016).
In respect to these issues, there are four factors that are significant for the Gucci internationalization strategy in emerging market like India, China etc.
Cultural Factors
It is one of the most important one local people language, perception, values or beliefs are important to study as these factors become a major source to influences the people perception positively. In case of India origin, people are quite deep-rooted with cultural values where friends or relatives’ opinions are important (Baack et al., 2013). It means that collectivism orientation is following in India. Gucci could hire local designers to concreate the right design for Asian country people.
Taste or market trend of region
It is an important factor to understand the taste of local people in terms to make buying decision. This consumption patter would guide the brand to get success in international market. In case of India, when it comes to fashion line then youngsters are more fascinating towards western style. Gucci through retain the western design through target youths but within affordable range (Javalgi and La Toya, 2018). People of India are price-sensitive so luxury brands also need to cut-off the heavy costing.
Supply & Demand: –
Supply & demand play an important role for business to enter into new market. The success of business is largely depended upon the supply chain of firm. Gucci is the international European brand where manufacturing unit is established in Spain. In that case, procuring similar designs for products would be difficult for entering into Indian market. That’s why, it is important factor to estimate the suppliers of local market or identify how much demand for the fashionable products in Indian region (Vellas, 2016). In respect to current scenario where growing youth rates are more in India. It makes the India as growing country in rapid manner. In that case, there are many international suppliers are working in India with tie-up with local suppliers. This strategy could also work for the Gucci in terms to list-down the excellent suppliers or distributors and tie-up with them for understanding local people taste or views while selecting any clothing piece (Javalgi and La Toya, 2018). These insight facts could also help the brand to understand people actual demand or how they implement its supplies to them.
Financial Transactions & Banking
This is another important factor for the internationalization. It is because considering how will get paid for the products and services from the market are the important decision to take. The international market i.e., Asian countries growth rate or banking system are different in compare to European countries. In that case, it become important to analysis of financial transactions or banking process in India. It is known that internet has made it easy to transit or make payment with digital payment system. Similarly, this system is also exploring by the Indian banks due to which it become easy for Gucci to make proper transaction or receiving the payments on time (Gabor, 2016). The net-banking or e-payment applications would help the country to receive the funds on time. At the same time, current exchange rate is something which firm need to decide for transactions as it is believed that payment based on current market price would be better for brand sustainability.
Licensing & Permits
This is another important factor to consider for every brand to make international market entry. It is because every government has certain laws or regulation for allowing foreign business to operate. In case of India, government is quite liberal for European brands but, government has certain regulations about the hiring of local people to set-up operations in India. Along with this, there are certain amount of taxes, duties that firm need to pay for the proper functioning of firm in country (Moşteanu et al., 2020). The following of these regulations allows firms to get licensing or permit to enter into the new or international market. In case of Gucci, it become quite ease to enter into Indian market by adhere the proper stated rules and regulations.
References
Baack, D.W., Harris, E.G. and Baack, D., 2013. International marketing. UK: Sage.
Gabor, D., 2016. A step too far? The European financial transactions tax on shadow banking. Journal of European Public Policy, 23(6), pp.925-945.
Gucci, 2021. Company Profile. [Online] Available at: https://www.gucci.com/uk/en_gb/
Javalgi, R.G. and La Toya, M.R., 2018. International marketing ethics: A literature review and research agenda. Journal of Business Ethics, 148(4), pp.703-720.
Moşteanu, D., Roxana, N., Faccia, D., Cavaliere, L.P.L. and Bhatia, S., 2020. Digital technologies’ implementation within financial and banking system during socio distancing restrictions–back to the future. International Journal of Advanced Research in Engineering and Technology, 11(6).
Tokatli, N., 2013. Doing a Gucci: the transformation of an Italian fashion firm into a global powerhouse in a ‘Los Angeles-izing’world. Journal of Economic Geography, 13(2), pp.239-255.
Vellas, F., 2016. The international marketing of travel and tourism: A strategic approach. Macmillan International Higher Education.
Wang, Y.S., 2016. Dynamic capabilities in fashion apparel industry: emergent conceptual framework. Baltic Journal of Management.
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