International Management - Entering a new market: India or China? The case of Caroll

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International Management: Entering a new market; India or China?
The case of Caroll: The fashion industry is one of the most profitable industries of the world, as well as one of the most competitive. Helped by the effects of globalization, clothing multinationals such as Nike, Gap, Zara or H&M have already conquered a large part of the world markets, and made this business global and standardized. Following this movement of international development, the French organization Caroll, would like to enter the Chinese or the Indian market to strengthen its worldwide market shares and generate as much profits as these huge markets can represent. TO this end, this report will try to see how to position the brand to succeed in an emerging market. To do so, I will first analyze the ready-to-wear market in France and position Caroll within it. I will then focus on the company, its strengths and weaknesses and the analysis of its strategy. To conclude, we will see how China and India could be decisive markets for the success of the brand abroad, which country the brand should decide to break into, and how it should act in order to succeed there.

Extraits

[...] The governance is stable even if the country is facing a inflation rate/year. The government embarked on a series of economic reforms in 1991 in reaction to a severe foreign exchange crisis. It sounded like a real opening of the frontiers to foreign investors and following this action, India's trade has increased significantly This is a very important factor. With a economic growth in 2007, the country is the second most growing of the world. More than 35% of the population lives below the poverty line, but a large and growing middle class of 150-200 million has disposable income for consumer goods. [...]

[...] In just a few years, Caroll International completely changed its image and increased its market shares. After having transformed its network in France, Caroll International began to expand in other countries in 1997. The company has now 270 shops in 11 different countries (70 shops are abroad). Caroll's culture is based on a shared brand vision and shared enthusiasm buttressed by strong product identity, a high degree of adaptability to the market and an innovative brand / distributor concept. Regarding the organization for example today at Caroll, the purchasing manager, collection coordinator, product managers, designers and purchasers all take an increasingly horizontal approach to their specialties Source : http://www.caroll.com/en/caroll/historique.php Now thanks to the SWOT analysis we will see which internal and external factors can create or destroy company's value. [...]

[...] Following a Glocal development strategy, the global product will be provided: clothes and accessories, but some of them adapted locally: more small sizes as they do not have the same morphology than in Europe for example or not red color clothes as according to their traditions, wearing red color clothes can be negative and can make you unlucky Nevertheless to keep cost down, the brand will keep standardizing its product such as that is why Chinese want when they buy foreign clothes look like Occidental people. In order to differentiate its products from the low-cost fashion multinationals such as Zara and H&M for example, the brand should keep high selling prices. Putting forward the Caroll Paris knowledge, quality and luxury image but also positioning the brand as a creator brand and not an industrialized one. I would advise to sell products at an average price situated between 200 Yuan for the accessories and 1800 Yuan for the clothes. [...]

[...] Not young girls nor teenagers Value proposition: the company offer good quality products which are trendy and elegant. Focus is also putted on welcoming and service quality in the shops Value network: the products are sold in owned retailed shops with a standardized design and merchandising. The products are designed and tailored in France by company's creators After having seen in which market the company was playing, and its main values, we can now talk about its major direct competitors on the sector focusing on the French market I - b / Main competitors The market of the active women is a market that is becoming always more popular than before. [...]

[...] Even if international clothing brand are not selling product everywhere in the country, many of them are already set up and have strong business networks running. The threat of substitutes (quite strong) the same than in China: the product is easily substitutable as it concern clothes, but more precisely in our case because it can be counterfeited or produced at a cheaper price in any Indian factories. The bargaining power of buyers (weak) one again, this is like in China: they do not have a major impact on the production as they cannot work together to order large volumes. [...]