Thursday, November 29, 2012

Which International Business Strategy is best suited for Indian Apparel company to expand business in European Union?

Strategy is the framework that managers apply to determine the competitive moves and business approaches that run the company. So  one can say that :
Strategy is managements idea on how to best

-                    Attract customers
-                    Operate efficiently
-                    Compete effectively
-                    Create value

Strategy in the global apparel industry is based on a combination of production, buying, and distribution forces. A large number of typical apparel manufacturers  are located in a low wage market. Many of them are having a small scale operation that employs a few to a few dozen workers. Apparel production is a highly labor intensive process.
The growing globalization of markets is changing the operational decisions of apparel firms.  Despite growing national concentration, retailing activities remain quite local. The top 10 retailers worldwide operated in an average of 10 countries in 2000, deriving less than 15 percent of their total sales from outside their home markets.
It means that the retailer has to have a high degree of localization. Italy will cater to rest of Europe. Customer preference for each country has  some variance. For example, the British seek out stores based on social sensitivities, Germans are price sensitive, and shoppers in the United states look for a mix of variety,, quality, and price.
When we look to strategy matrix  chart (Integration Responsiveness Grid)
Apparel fall under  the high level of local responsiveness and low to high  pressure for integration for global responsiveness.
This leads  to preliminary conclusion to have different short term and long term strategies.
Short Term StrategyExporting strategy
Long Term Strategy  :  Transnational strategy

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