Loading presentation...

Present Remotely

Send the link below via email or IM

Copy

Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.

DeleteCancel

Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

International Environment of Business

An exclusive business pitch prezi for our fans! Click on 'Save a copy' above to copy it to your account and edit freely!
by

Kezia Rosiana

on 15 May 2015

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of International Environment of Business

COUNTRY PROFILE
Economic Policy Highlights
COUNTRY OF CHOICE
POLAND
Population: 38.346 million
Capital City: Warsaw
Major Language: Polish
Government type: Republic
Ethnic Composition:
Polish (96.9%),
Silesian (1.1%),
German (0.2%) (MarketLine, 2014)
First shop opened in Dublin, Ireland in 1969 under name Penneys
1973 first UK shop in Derby
Over 250 stores across Europe
First shop in Boston, USA in 2015
Parent Company
Associated British Food PLC
Headquarter is located in Dublin (Primark.com,2015)
COMPANY HISTORY
FOREIGN MARKET SERVICING STRATEGY
The mission statement
: "Primark is to supply quality clothing at prices perceived to offer real value."

The vision statement
: "Primark is to provide quality products and services to their customer through prices strategy"

Slogan
: "Look Good Pay Less"
COUNTRY ANALYSIS
Women/Men/home/baby and kids wear
accessories , beauty products, confectionery

Sub Brands
Lines for women – fashion, leisure, denim, lingerie
Lines for men – fashion, sport, leisure
Lines for kids
Accessories, home
PRODUCTS
COMPANY MISSION
AND VISION
Why Go Global
The country is a member of the North Atlantic Alliance and the European Union (EU). The Polish government has strong ties with the US, Germany, France, UK, Italy, Lithuania, the Czech Republic, Slovakia, and Hungary (MarketLine, 2014)
STRENGTHS
WEAKNESSES
CULTURAL
COUNTRY COMPARISON
ADMINISTRATIVE
GEOGRAPHICAL
ECONOMICAL
COUNTRY COMPARISON
PRIMARK
POSSIBLE ENTRY MODE
How and When to Go Global
Entry Modes
Import, export, joint venture, wholly owned subsidiary, franchising (Phatak, Bhagat, and Kashlak, 2005)

Factors to consider
Cultural, political, geographic, economic
- Risk

Early entry x Late entry
(Lieberman and Montgomery, 1998)
COUNTRY COMPARISON
COUNTRY COMPARISON
BUSINESS MODEL
Developed by Alexander Osterwalder in 2008
Accurate and complete mapping of a current business model.
Used by managers in strategic planning.
Displays critical information needed to effectively complete the Foreign Market Servicing Strategy (FMSS).

How will we use it?
Identify factors to develop a complete SWOT analysis
CANVAS MODEL
Member of:
EU (2004)
WTO (1995)
GATT (1967)
Upcoming Tax Reforms
Not expected to detour FDI (EY, 2014)
Economic Goals:
Consolidation of debt
Reduce government spending
Reduce of political inefficacy
Maintain considerable growth rate (CIA, 2015)
COUNTRY PROFILE
GDP Growth
COUNTRY PROFILE
Currency Control
Polish Zloty
zł 5.59 = £ 1 BPS (xe, 2015)
Considered stable (MSP 2014, Cbonds 2013, xe 2015, Forex 2015)
Value expected to appreciate against Euro (MSP, 2014)
Influenced by Euro and economic growth (Forex, 2015)
Reluctance to adopt the Euro
Focus of economic policy (Eurostat, 2013)
Eurozone crisis (WSJ, 2012)
Eventually must adopt Euro (Europa, 2008)
COUNTRY PROFILE
Foreign Direct Investment
2014 FDI into Poland:
160.5 Billion Euro
1: Germany at 27.5 bn
8th: United Kingdom at 6.7 bn (PIFI, 2014)
FDI Into retail sector
Projected to grow
Dominated by MNCs
Influenced by interest for cheaper brands (Euromonitor, 2014)
2006-2014 Corporate income tax rate
: 19%
United Kingdom: 21% (Ernest & Young, 2014)
INTRODUCTION
Miluse Masarova (c7141420)
Corey Novotny (c7151548)
Katelyn Wiater (c7153863)
Rosiana Puspitasari (c7150746)
PRIMARK'S FOREIGN MARKET SERVICING STRATEGY IN POLAND
CONTENT PAGE
INTRODUCTION
COMPANY ANALYSIS
COUNTRY ANALYSIS
ENTRY MODES
CONCLUSION
MARKET ANALYSIS
POLAND APPAREL RETAIL INDUSTRY
PEST ANALYSIS
POLITICAL
PEST ANALYSIS
ECONOMICAL
PEST ANALYSIS
SOCIAL
PEST ANALYSIS
TECHNOLOGICAL
Primary motives
- Business growth
- Increase scale of production and lower unit cost
- Slow home market growth (Harrison,2010)
- Home market competitors (Asda, George)
-Global apparel retail industry is estimated to have annual growth rate 5.5%(MarketLine, 2014)
Firm specific factors
- Physical present, following competitors
- Secure market share
- Cheap and skilled labour available (Harrison, 2010)
MARKET ANALYSIS
COMPETITORS
INTERNATIONALIZATION
THEORY
SUPPLIERS
700 suppliers
China, India, Bangladesh, Turkey and Eastern Europe
Code of Conduct
ensuring good working conditions, fair wages, inspections

1969
First store opens in Dublin, Ireland
May, 2006
Mardrid and Spain
Dec, 2008
Rotterdam, The Netherlands
May 2009
Lisbon, Portugal and Bremen, Germany
Dec 2009
Liege, Belgium
Sep, 2012
Innsburck, Austria
Dec, 2013
Marseilles, France
Fall 2015
Boston, America
PRIMARK INTERNATIONAL
BUSINESS OPERATION
1973
First store opens in Derby, UK
PRIMARK SWOT
ANALYSIS
OPPORTUNITY
THREAT
since 2003, poland's economic performance has
been relatively strong
In 2006, GDP grew at 6.23%, owing to an increase in private consumption and strong growth in FDI and exports
In 2007, the Polish economy grew 6.79%. With the start of the global financial
crisis, growth declined to 5.13% in 2008.
Poland was the only country in the EU that escaped recession in 2009,
recording growth of 1.63% owing to its strong economic policies and robust domestic demand.
A resilient banking sector
and a flexible currency also supported the country's growth. The economy grew by an average of 3.47% during 2010-12.
In 2013, growth rate slipped to 1.58% due to a protracted impact of the euro area crisis, which had an impact on
consumer and business sentiment
According to MarketLine (2014) forecasts, the economy will grow by 2.99% in 2014, due to brighter economic outlook of its trading partners and domestic demand.
(MarketLine, 2014)
The Polish apparel retail industry experienced moderate growth over the period 2009-2013. This trend is predicted to
continue over the forecast period through to 2018.
The Polish apparel retail industry had total revenues of $8.0bn in 2013, representing a compound annual growth rate
(CAGR) of 5.1% between 2009 and 2013

Poland accounts for 1.9% of the European apparel retail industry value.

MARKET ANALYSIS
MARKET SEGMENTATION IN POLAND
According to MarketLine, the Polish apparel retail industry experienced moderate growth over the period 2009-2013.
The Polish apparel retail industry is typically composed of large numbers of similar retailers, many of which are independents



MARKET ANALYSIS
(MarketLine, 2014b)
PRIMARK TARGET MARKET
Age Group
Especially Teen to Young adults under 35 years of age

Income Group
Middle to low income Polish

Using cost leadership strategy in the UK market
To attract its customers Primark offers affordable good quality products
Primark has a fashion scheme for people less than 35 years of age
By volume Primark is now the second largest clothing retailer in UK
(Businessteacher.org.uk)
Primark does not advertise
Their line of services and product innovations should be enhanced to achieve their goals
Primark's child labor
Poor working conditions and disrespecting workers rights are other issues
Absence of Online store (Businessteacher.org.uk)
Huge market opportunities around the globe
Use cheap and skilled labor for the supplying of product
Day by day the demand for latest design with low price are increasing
Expanding ventures (Businessteacher.org.uk)
Complex business environment
Increase of competition
Increasing labor and raw materials
Advertising (Businessteacher.org.uk)
7 in 10 people people bought clothes online in the past 12 months in UK alone (Mintel, 2014)
21% of Poland population shop online (eCommerce Europe, 2013)
(Statista, 2015)
PRIMARK'S REVENUE
Issue
: Lack of social services
Health care
Education
Transportation

Solution
: Building a partnership between private and public sector
Zloty as the currency
Any business operating or trying to start up in any country has to take costs into mind
Costs occur on all levels from labor and taxes to supplies and distribution
Poland looks good for foreign investors (Carmichael, 2006)
Poland social sector is by far its weakest aspect
Much money is being spent by the Polish government as well as being aided by the European Union in order to bring some of the social services up to standard (Carmichael, 2006)
FOR
AGAINST
Increases wealth and efficiency in all nations​
Support efficiency of locals firms​
Enhance trade (Harrison, 2010)
Elimination of jobs and lowering wages in developed countries​
Exploiting workers in developing countries​
Loosing national sovereignty/cultural identity (Harrison, 2010)
Poland has had to de-monopolize it’s technology providers for services

People are becoming more dependent on online shopping (Carmichael, 2006)
Argument for globalization
High control
Integrated system
Low Dissemination Risk
Resource Commitment

High
:
Asset specificity
Brand equity
Financial capability
International experience
Market potential

Low
:
Country risk
Cultural distance
Government restrictions

Wholly-Owned Greenfield Investment
ENTRY MODE
References
(CIA, 2015)
CIA (2015)
World Bank Data (2015)
(CIA, 2015)
(CIA, 2015)
(XE, 2015)
(Market Line, 2014b)
Wholly-Owned Greenfield Investment
Minimizing Disadvantages
MARKET ANALYSIS
Apparel Retail Industry Geography Segmentation
(MarketLine, 2014b)
INTERNATIONALIZATION
THEORY
Gradual incremental steps to international business expansion is based on a series of incremental decisions, whose successive steps are based on learning and knowledge acquisitions about foreign market and operation (Johanson and Weidersheim-Paul, 1975)
WROCŁAW
KRAKÓW
M1 Shopping Mall

25,000 sq. feet
Low-Middle Price Range
Magnolia Shopping Mall

30,000 sq. feet
Mid-Price Range
Niesamowite ceny™
Niesamowite mody,
POLSKA
Minimizes Costs
Saves Time
Primark Strategy:
Locations outside
capitals and city centres
Purchasing pre-built
retail locations and
shipping from existing
warehouses
Niesamowite ceny™
Niesamowite mody,
POLSKA
Corporate Social
Responsibility
HERproject
– Health enables returns
health care education for women working in factories
Rana Plaza
compensation
CONCLUSION
Primark has been using Uppsala since 1973, beginning of their business operation.
Gradually opening through Europe
They will apply this knowledge as they go to the U.S.
High start-up costs
Time consuming
Criteria for selecting entry mode
Characteristics of Entry Modes
Why Not
Brownfield
/Acquisition?
Acquiring an existing firm in the host country
High risk
Weaker supply chain
Different corporate culture
Strong Primark Brand Identity
Primark Potential

Location of choice
Poland

Suggested Entry Mode
Wholly-Owned Greenfield
Investment
Retail Stores
Future Uppsala Expansion

Appsso.eurostat.ec.europa.eu, (2013). Eurostat - Data Explorer. [online] Available at:
http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ert_bil_eur_a&lang=en [Accessed 4 May 2015].

BBC News, (2014). Primark to open its first US stores. [online] Available at:
http://www.bbc.co.uk/news/business-27122815 [Accessed 4 May 2015].

Carmichael, L. N.p., 2006. Web. 13 Apr. 2015.

Cbonds.com, (2013). Poland satisfied with zloty's stability - dep FinMin. [online] Available at:
http://www.cbonds.com/news/item/670765 [Accessed 4 May 2015].

Checklists. (2001) Performing a SWOT analysis. (Checklist 005).(Strengths, Weaknesses
Opportunities, Threats, Checklists

CIA, (2015) The World Fact Book [Internet]. Available from:
<https://www.cia.gov/library/publications/resources/the-world-factbook/> [Accessed 25 April 2015].

dotcomriver, (2013) eCommerce Poland 2013 [Internet]. Available from:
<http://dotcomriver.com/files/report-ecommerce-poland-2013.pdf> [Accessed 27 April 2015].

Ernst & Young Global Limited, (2015). Poland. 2015 Worldwide Corporate Tax Guide. [online] Ernst & Young Global Limited.
Available at: http://www.ey.com/GL/en/Services/Tax/Worldwide-Corporate-Tax-Guide---XMLQS?preview&XmlUrl=/ec1mages/taxguides/WCTG-2015/WCTG-PL.xml [Accessed 4 May 2015].


Ernst & Young, (2010) Doing Business in Poland [Internet]. Available from:
<http://www.dzp.pl/files/Publikacje/Doing%20Business%20in%20Poland%202010_9564213.pdf> [Accessed 27 April 2015].

Forextraders.com, (2015). USDPLN Chart | Live U.S. Dollar Polish Zloty Chart | Historical USD/PLN rates. [online] Available at:
http://www.forextraders.com/usdpln-chart.html [Accessed 4 May 2015].


Graham, A. (2008). Primark hits the marketing sweet spot. - Customer First. [online] Customerfirst.typepad.com.
Available at: http://customerfirst.typepad.com/my_weblog/2008/09/primark-hits-the-marketing-sweet-spot.html [Accessed 4 May 2015].

Harrison, A. (2010) Business environment in a global context. Oxford [England], Oxford University Press.

IESE Insight, (2011). Primark: £10? Ooh that's Expensive!. No Bells, No Whistles: The Simple Case of Primark.
[online] Madrid: IESE Insight. Available at: http://www.ieseinsight.com/doc.aspx?id=1274 [Accessed 4 May 2015].

Johanson, J. & Wiedersheim-Paul, F. (1975) The Internationalization of the Firm - Four Swedish Cases. J
Management Studies, 12 (3), pp.305-323.

Liebermann, Marvin B. and David B. Montgomery (1988) ‘First-mover advantages’, Strategic Management
Journal, Vol. 9, Summer, pp. 41-58.

Lu, Y., Karpova, E. and Fiore, A. (2011). Factors influencing international fashion retailers' entry mode choice.
Journal of Fashion Marketing and Management: An International Journal, 15(1), pp.58-75.

Lynn Childs, M. & Jin, B. (2014) Is Uppsala Model Valid to Fashion Retailers? An Analysis from
Internationalisation Patterns of Fast Fashion Retailers. Journal of Fashion Marketing and Management: An International Journal, 18 (1), pp.36-51.

MarketLine, (2014) Apparel Retail in Poland [Internet].

MarketLine, (2014) PESTLE Country Analysis Report: Poland [Internet].

MarketLine, (2015) Global Apparel Retail ndustry [Internet].

Mintel, (2014) Fashion Online - UK - August 2014 [Internet].
Available from: <http://academic.mintel.com/display/713417/> [Accessed 30 April 2015].

Msp.gov.pl, (2014). Zloty steady on the currency market, but risk of
appreciation lingers - Economic News - Ministry of Treasury. [online] Available at: http://www.msp.gov.pl/en/polish-economy/economic-news/5633,Zloty-steady-on-the-currency-market-but-risk-of-appreciation-lingers.html [Accessed 4 May 2015].

Osterwalder, A., Pigneur, Y. and Clark, T. (2008). Business model generation.

Paiz.gov.pl, (2014). PAIiIZ | Foreign direct investments in Poland | Inwestycje w Polsce. [online]
Available at: http://www.paiz.gov.pl/poland_in_figures/foreign_direct_investment [Accessed 4 May 2015].

Perrigot, R., López-Fernández, B. & Eroglu, S. (2013) Intangible Resources and Plural Form as
Drivers of Franchise Internationalization: Examination within a Two-Country Perspective. Journal of Small Business Management, 51 (4), pp.557-577.

Phatak, A., Bhagat, R. and Kashlak, R. (2009). International management. Boston, Mass.:
McGraw-Hill Irwin.

Phatak, Bhagat, and Kashlak (2005) International Management, McGraw-Hill/Irwin.

Piasecki, K. (2014). Polska w strefie euro znajdziemy si. [online] Biznes.interia.pl.
Available at: http://biznes.interia.pl/wiadomosci/news/polska-w-strefie-euro-znajdziemy-sie-najwczesniej-po-2020,2051575,4199#iwa_item=5&iwa_img=0&iwa_hash=16484&iwa_block=[Accessed 4 May 2015].

Primark.com, (2015). Primark - Our Values. [online] Available at:
http://www.primark.com/en/ur-ethics/our-performance/our-values [Accessed 6 May 2015].

Shuen, (2008). Yahoo / Primark - Sino Infotech Holdings Limited. [online] Biz.yahoo.com.
Available at: http://biz.yahoo.com/p/0/0205.hk.html [Accessed 4 May 2015].

Wasilewski, P. (2012). Polish Leaders Hope Debate Can Change Perception of Euro. [online] Wall Street Journal.
Available at: http://www.wsj.com/articles/polish-leaders-hope-debate-can-change-perception-of-euro-1412951831 [Accessed 4 May 2015].

Wehr, C. (2014). Primark is a top business model, says retail expert. Belfast Telegraph. [online]
Available at: http://www.belfasttelegraph.co.uk/business/news/primark-is-a-top-business-model-says-retail-expert-30570922.html [Accessed 4 May 2015].

World Bank, (2015) Ease of Doing Business Index [Internet].
Available from: <http://data.worldbank.org/indicator/IC.BUS.EASE.XQ> [Accessed 26 April 2015].

Wyszkowska-Kuna, J. (2014) Competitiveness in International Trade in Knowledge-Intensive Services – The Case of Poland. Comparative Economic
Research, 17 (2).

Xe.com, (2015). XE.com - GBP/PLN Chart. [online]
Available at: http://www.xe.com/currencycharts/?from=GBP&to=PLN [Accessed 4 May 2015].

Niesamowite ceny™
Niesamowite mody,
POLSKA
Full transcript