Essay
NoVaaArticle Discussions
1. What are the advantages and disadvantages of incremental internationalization? (From the article: Internationalization Process of Fast Fashion Retailers: Evidence of H&M and Zara)
Globalization has made many businesses all over the world to adopt strategies that will give them a competitive edge over other similar businesses. Some of them have adopted incremental internationalization, which refers to the behavior of firms to start operations in domestic markets and later expand into new markets. This helps firms to establish themselves in local markets before venturing into new foreign markets. As such, it makes sense for a firm to first raise capital and learn the most efficient business operations locally before it can expand into other countries. Another advantage of incremental internationalization is that firms are facilitated to gather sufficient resources that enable them to come up with effective strategies to enter the new markets. For instance, a firm intending to operate globally should first consider setting up operations in a stable environment that will facilitate for its growth and sustainability. Based on the lessons learnt, it can then identify more effective strategies when operating in other countries. Some may argue that the model has become outdated due to increased competition that has forced companies to seek ways of faster penetration into new markets. However, incremental internationalization is an effective model for firms intending to grow gradually.. this model is also criticized as it encourages firms to have late market entry, which may limit their market share as other early entrants may have already taken over the market.
2. Why are international brands first introduced as premium brands in developing countries? (From the article: Evolution Patterns of Apparel Brands in Asian Countries: Propositions From an Analysis of the Apparel Industry in Korea and India)
It makes sense to attach higher prices to products so as to earn higher earnings. This concept has been used by many international firms, as premium brands are associated with high quality and well–designed products. This is due to the fact that local apparels are regarded as being inferior in quality and design. Therefore, premium brands fetch better prices, and the firm earns a competitive advantage over other firms producing domestic apparel. For instance, the Tommy Hilfiger brand is considered as a premium brand in India, and it is so costly that the price of one item is twice a worker’s monthly income. To support this point, most developing countries prefer wearing international brands to their own designs. This is due to the mentality that global brands are more superior. However, premium pricing is only a marketing strategy to enhance a company’s competitive advantage.
3. Which is the best method of approaching a consumer for retail clothing? (From the article: International Brand Management and Strategy: Apparel Market in China)
The far end of the supply chain is the consumer, who has a big impact on the success of an apparel business. However, approaching consumers is one of the biggest challenges that businesses have to go through. It would help if the were to be aware that multiple methods of communication that are cumulated over time are the best options for approaching consumers. When making decisions regarding clothing items, consumers rely on pre–existing knowledge. Various communication sources should be used to get to the consumers so as to enhance brand awareness. For instance, in China, consumers for apparel do not take time to search for the best clothing items that are available, as their basis for selecting a particular brand is due to the attributes that have been communicated to them via various communication channels. In other parts of the world, this strategy can also be adopted. A company that sends a consistent message about its brand raises consumer awareness, therefore influencing consumer purchase decisions.