To identify the major challenges faced by the western luxury organisations in china: in the context of the fashion industry

Introduction of the problem statement

This section of the research study provides the brief background of the research with developing the research objectives and questions. It also improves the depth understating on the research problem.

Background of the research

Due to continuous changes in the fashion industry and customer buying behaviour, it is difficult for the organisations to run the business in the market effectively. A company faces lost of issues and challenges in order to expand its business in another country.

These issues and challenges can be in terms of legal, environmental and cultural. This research discusses the major challenges faced by the western luxury organisation in China, in the context of the fashion industry (Liu, et. al. 2016).

In China, there are different laws and regulations that are essential for an organisation during the operation. Sometimes, it can be seen that organisation does not become successful to generate sufficient sales and market share.

Along with the government challenges, the western luxury fashion companies also face the challenges in the context of the high competition, cost of skilled labour, human resource, intellectual property, administration (Macchion, et al. 2015).

In the current scenario, Chinese people are more conscious towards the luxury products. At the same time, it is also indentified that the demand for the luxury fashion products is continuously increasing that is why western luxury fashion companies are planning to establish the business in China.

But, companies face issues and challenges to smoothly develop business in China. With the growth of China economic, the purchasing power of the customers has increased.

In China, there are many developed cities where people are enabled to pay for luxuries fashion product (Balmer & Chen, 2015). But, at the same time, there are some other factors that affect the business of the western luxury firms.

Research questions

Following research question will be explored from this study:

  • What are the major challenges for western luxury fashion organisations in China?
  • What are main culture difference and its impact on western luxury fashion organisations in China?
  • How western luxury fashion organisations can establish its business in China effectively?

Research Aim and Objective

The main aim of the research will be “to identify the major challenges faced by the western luxury fashion organisations in China’. In order to achieve this aim, the following research objectives will be achieved.

  • To identify the challenges and issues of Western luxury fashion organisations in China
  • To evaluate the impact of culture differences on western luxury fashion organisations in China
  • To suggest strategies for overcoming the challenges to establishing business in China

Research problem

The main research problem of this research is the developing the concept of globalisation and demand of the fashion industry in China. In the fashion industry, it is difficult for an organisation to keep the sustainable sales always because in the fashion industry the customer trends change continuously.

As this research study focuses on the challenges that are faced by the western luxury fashion firms in Chain. China has a large market that opportunities due to this, companies are developing a plan to establish the business in China (Kapferer, 2014).

At the same time, It will determine the various issues that affect the business establishment of the firms. According to a report of global management consultancy Bain & Company, there are more than 350 million luxury consumers in the world in which 50 millions are in China.

It shows that there are lots of business opportunities for Western Luxury fashion companies in china. But, at the same time, the different between China and Western culture raises problems for companies to establish business. At the same time, rules and regulations are also major issues for Western companies to survive in China.

To identify the major challenges faced by the western luxury fashion organisation in China is a quite significant and interesting topic. The identification of challenge is one of the essential tasks for companies that are going to establish the business in China.

It will help the company to know major challenges that can affect the business of the companies. This research study will also provide significant strategies to deal with these issues. It will be helpful to overcome the challenges in the Chinese marker and will help to companies to get market share.

This research will be helpful for the researcher as the both academic and professional career viewpoint. In this, the completion of the research will help researcher to get the degree in the relevant subject. Along with this, if the researcher has an aim to establish business in China than it will help them to deal with these challenges effectively.

Literature Review

Challenges for Western luxury organisations in China

In the views of Balmer & Chen (2015), it is difficult for the western companies to do business in the Chinese market because it includes lots of market challenges. In China, the challenges can be seen as the different culture and languages. There are different culture people that have different needs regarding the fashion.

So, it is difficult for the western luxury fashion organisation to establish and run business in China. In oppose of this, Xu, et al. (2014) determine that Western fashion companies face different kinds of issues during operating business in Chinese market.

In China, the large part of the market is not opened for the foreign companies to operate the business. The government of China does not allow the western companies to participant in the market due to this it is difficult to Western fashion companies to earn sufficient profit.

In the research study conducted by Macchion, et al. (2015), it determined in the research study that western luxury organisations face the various changes in the China marker. In this, main is issues are that Western firms face the strong competition from the local fashion organisations.

In China, there are also lots of well-known fashion brands that offer the luxuries products to customers. These organisations effectively compete with the western companies and minimize the profitability of western companies.

At the same time, Baldassar, et al. (2015) found that the China has a complex business culture that creates challenges for the western fashion firms. It also found that the level of the bribery and corruption is high in China as compared to the West Union.

It affects the business establishment and business operation of the western luxury fashion companies. Beside of this, the different argument is developed by Choi, et al. (2013), where it is found that the Chinese language is a challenge for a Western luxury fashion company in China.

The impact of culture differences on western luxury organisations in China

According to Tse & Wright, (2014), the culture of china is different from the culture of the west due to this western luxury organisations face challenges. A company cannot run business with the same strategies in the different culture if the company do this then it has to face challenges.

In the international business environment, each country has a different set of the various rules, regulation, taxation, different currency and other legal policies. In the same contrast of this, China also has a different set of the policies and regulation.

It affects the western companies in the different manner. Furthermore, Merk (2014) posits that culture different affect the sales of the multinational organisation. It creates the problem for the organisation to deal with the suppliers and customers.

The research paper prepared by the Deng, et al. (2010) explained that there is a significant impact of culture difference on the western luxury fashion organisation. It is because the leadership of the west style is focused on the profit generation on the other hand Chinese leadership focuses on the improving the skill development of the employees.

Strategies for overcoming the challenges to establish business in China

Kapferer (2014) suggests that in order to overcome the challenges, the western luxury fashion organisations can make contact with the large and pre established companies. It will help the company to get the local reference. It will also help the new company to make important reference in the Chinese market.

In support of this, Baldassar, et al. (2015) recommended that companies are interested in establishing their business in China should study each facture of the Chinese market that can affect the business of fashion industry.

At the same time, Merk (2014) argued that Western companies should develop and implement the effective plan during enter in the Chinese market. In this plan, the company should be clear on each factor that can affect the business activities of the company.

To have an effective plan helps the organisation to deals with various kinds of challenges and issues.

Research Methodology

Research philosophy

This research is based on the major challenge faced by the western luxury fashion organisations in China. In this, the researcher would like to use interpretivism philosophy over the positivism and realism philosophy. It will help the researcher to develop the dept understating of the research issues (Babbie, 2013). This research study will enable the researcher to identify the major challenges faced by the western fashion firms in China.

Research strategy

In the research methodology, there is a significant role of the selection of the appropriate research strategy because it enables the researcher to collection the valid and reliable data to achieve the research objective.

For this research, the researcher will use survey and literature research strategies that will help the researcher to collect the required data for complete the research (Groves, et al. 2011). In this, survey research strategy will be conducted through the questionnaire as the primary research.

At the same time, literature review research strategy will also enable the researcher to gain the data and information from secondary sources such as company reports, journals, articles, websites and textbooks.

Data collection method

In the research methodology, the selection of the appropriate data collection method helps the researcher to collect the required data and information by the help of different sources.

There are two types of data collection methods such as primary and secondary methods. In this research, the researcher will use both data collection methods (Kapferer, 2014). It will help the researcher to collect the relevant data and information on challenges faced by the western luxury fashion organization in China.

The primary data will be collected by the researchers with the help of survey through the questionnaire. For this, the researcher will prepare a set of questionnaire that will be asked by the selected participants (Babbie, 2013).

At the same time, secondary data will be used for collecting the information from books, official websites, journals, etc.  It will be effective to develop the depth understanding of the research topic.

Sampling method

The sampling method is helpful in the research methodology to select the enough participants in order to collect the data and information. It helps to collect the views and opinions of participants to complete the research (Choi et al., 2013).

There are two types of sampling methods such as probability and non- probability sampling that is used by the researcher for collecting the information from the respondents. In concern of this research, probability sampling technique will be used by the researchers for collecting the required data and information.

In probability sampling, random sampling method will be used because there are no biases in the research outcomes and equal opportunity is created for the people (Lo, 2012). For this research study, the questionnaire will be mailed to 50 respondents that will be the manager of western luxuries fashion firm in China (Li & Baron, 2011).

It is because target the manger to get the response will be helpful for the researcher to get the clear idea about the challenges that are faced by the western luxury organisations in China (Deng et al., 2010). It will also make easy the researcher to generate the valid research outcomes and to successful accomplish the research aim.

Data analysis techniques

In the research methodology, it is important for the researcher to choose an effective and reliable data analysis technique in order to get valid and reliable research outcomes.  There are two kinds of data analysis techniques that are used by the researcher to analyse the collected data.

In concern with this research study, the researcher will use the quantitative research analysis technique with the help of Ms Excel Software for presenting the data in the form of graphs and tables. The graphical representation of collected data will facilitate in maintaining relevancy in the research study (Miller, 2012).

Research Ethical Issues

In this, the researcher will consider the ethical issues related to the primary and secondary data collection. Additionally, not sharing the personal and professional information of the clients will be the major priority of the researcher. In the secondary data, the researcher will provide the references and the citation of all secondary sources properly.

Research Project Plan

For this research study, the below dissertation plan will be followed by the researcher. It will start on 5th July and will be accomplished within 13 weeks.

Activities Weeks
1 2 3 4 5 6 7 8 9 10 11 12 13
Developing aims and objectives
Research background and questions
Literature review
Research philosophy and approach
Research strategy and selection of data collection method
Data analysis
Recommendations and submission


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Baldassar, L., Johanson, G., McAuliffe, N., & Bressan, M. (2015) Chinese migration to the New Europe: The case of Prato. In Chinese Migration to Europe. UK: Palgrave Macmillan.

Balmer, J. M., & Chen, W. (2015) China’s brands, China’s brand development strategies and corporate brand communications in China. Journal of Brand Management, 22(3), pp. 175-193.

Choi, T. M., Chow, P. S., & Liu, S. C. (2013) Implementation of fashion ERP systems in China: Case study of a fashion brand, review and future challenges. International Journal of Production Economics, 146(1), pp. 70-81.

Deng, Z., Lu, Y., Wei, K. K. & Zhang, J. (2010) Understanding customer satisfaction and loyalty: An empirical study of mobile instant messages in China. International Journal of Information Management, 30(4), pp. 289-300.

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Liu, S., Perry, P., Moore, C., & Warnaby, G. (2016) The standardization-localization dilemma of brand communications for luxury fashion retailers’ internationalization into China. Journal of Business Research, 69(1), pp. 357-364.

Lo, B. (2012) Ethical Issues in Clinical Research: A Practical Guide. UK: Lippincott Williams & Wilkins.

Macchion, L., Moretto, A., Caniato, F., Caridi, M., Danese, P., & Vinelli, A. (2015) Production and supply network strategies within the fashion industry. International Journal of Production Economics, 163, pp. 173-188.

Merk, J. (2014) The rise of tier 1 firms in the global garment industry: Challenges for labour rights advocates. Oxford Development Studies, 42(2), pp. 259-277.

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Tse, T., & Wright, L. T. (2014) Luxury brands and deriving fashion meanings in a Media Context in Hong Kong. Luxury Brands in Emerging Markets, New York: Palgrave Macmillan, 155-164.

Xu, Y., Chen, Y., Burman, R., & Zhao, H. (2014) Second‐hand clothing consumption: a cross‐cultural comparison between American and Chinese young consumers. International Journal of Consumer Studies, 3

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