Send the link below via email or IMCopy
Present to your audienceStart 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.
Make your likes visible on Facebook?
You can change this under Settings & Account at any time.
International Environment of Business
Transcript of International Environment of Business
Economic Policy Highlights
COUNTRY OF CHOICE
Population: 38.346 million
Capital City: Warsaw
Major Language: Polish
Government type: Republic
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
Associated British Food PLC
Headquarter is located in Dublin (Primark.com,2015)
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"
: "Look Good Pay Less"
Women/Men/home/baby and kids wear
accessories , beauty products, confectionery
Lines for women – fashion, leisure, denim, lingerie
Lines for men – fashion, sport, leisure
Lines for kids
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)
POSSIBLE ENTRY MODE
How and When to Go Global
Import, export, joint venture, wholly owned subsidiary, franchising (Phatak, Bhagat, and Kashlak, 2005)
Factors to consider
Cultural, political, geographic, economic
Early entry x Late entry
(Lieberman and Montgomery, 1998)
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
Upcoming Tax Reforms
Not expected to detour FDI (EY, 2014)
Consolidation of debt
Reduce government spending
Reduce of political inefficacy
Maintain considerable growth rate (CIA, 2015)
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)
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
United Kingdom: 21% (Ernest & Young, 2014)
Miluse Masarova (c7141420)
Corey Novotny (c7151548)
Katelyn Wiater (c7153863)
Rosiana Puspitasari (c7150746)
PRIMARK'S FOREIGN MARKET SERVICING STRATEGY IN POLAND
POLAND APPAREL RETAIL INDUSTRY
- 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)
China, India, Bangladesh, Turkey and Eastern Europe
Code of Conduct
ensuring good working conditions, fair wages, inspections
First store opens in Dublin, Ireland
Mardrid and Spain
Rotterdam, The Netherlands
Lisbon, Portugal and Bremen, Germany
First store opens in Derby, UK
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.
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 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
PRIMARK TARGET MARKET
Especially Teen to Young adults under 35 years of age
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
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
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)
: Lack of social services
: 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)
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
Low Dissemination Risk
Wholly-Owned Greenfield Investment
World Bank Data (2015)
(Market Line, 2014b)
Wholly-Owned Greenfield Investment
Apparel Retail Industry Geography Segmentation
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)
M1 Shopping Mall
25,000 sq. feet
Low-Middle Price Range
Magnolia Shopping Mall
30,000 sq. feet
capitals and city centres
retail locations and
shipping from existing
– Health enables returns
health care education for women working in factories
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
Criteria for selecting entry mode
Characteristics of Entry Modes
Acquiring an existing firm in the host country
Weaker supply chain
Different corporate culture
Strong Primark Brand Identity
Location of choice
Suggested Entry Mode
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: Â£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.:
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].