Iycee Charles de Gaulle Summary Challenges Faced By An International Expansion Commerce Essay

Challenges Faced By An International Expansion Commerce Essay

This study is about a company which is a apparels industry based in the north E of England in Darlington. This company which is owned by my friends Father and has been established for good over 15 old ages.

Mr Sandhu was employed by a household friend in the 1970s where he gained experience in the vesture sector, he picked up cognition and accomplishments on how to run the labour facet of vesture fabrication. After this he left this occupation and with his nest eggs opened up his ain vesture company in Darlington. At first the distribution channels was limited so they started selling their goods through market stables. The company employed 20 people but so expanded to more.They specialise in fabrication vesture for adult females and kids.

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Their chief distributing channel at this clip after the market stalls was to little independent retail merchants across the England and providing Yours Clothing and late started bring forthing garments for Lipsy London.At the start of 2011 Mr Sandhu decided to work on a scheme that will increase net incomes and to travel international. The program was to believe of what state labor and stuffs would be inexpensive and the twenty-four hours to twenty-four hours running of the concern.

He had to take into consideration the sum of employees and if he was traveling to purchase a new mill or rent one. He took a legion sum of trips to India to see which one would be more cost beneficial for him.D S Fashions Ltd scheme is “ To bring forth alone high quality goods, through methods which involve cost efficient fabrication, and enables us to retail our goods to reputable companies at inexpensive monetary values, ethically and reasonably which benefits all stakeholders ”To accomplish these aims outlined in the statement above the company had to lodge to a certain way, the concern environment which affects the net incomes of the company such as the stuff, labor, machinery and revenue enhancement all was considered before a strategic program was thought approximately. The vesture fabrication industry in the UK is altering where more companies are now traveling abroad to put up mills because the costs are lower to run and cheaper to bring forth garments. This means there is increased competition from rivals and the external factor demands to be considered, before the move to travel international is considered. DS Fashions Ltd used this theoretical account to make strategic program this is what the theoretical account looked like:

Aims

External factors impacting concern Plague

Internal factors impacting concern SWOT

Plan to accomplish aims

Implement Plan

Review and Evaluate

To look into further and to acquire a broader image of what issues can originate a PEST analysis was created which assessed the Political, Economical, Social and Technological factors which could impact the external influences on the international enlargement.This is a PEST analysis on the external environment and external influences that could impact the enlargement to India.

PoliticalWarChanges in Import responsibilitiesVAT risesBetter dealingss between India and UKEconomicInflationCreates new employment chances hence cut downing unemploymentBeneficial for the UK and Indian economic systemSocialPeoples might non desire apparels from IndiaNew tendencies in manner can lend to widen vesture lines, which can do enlargement for millTechnologicalThe usage of the cyberspace is good because trips to India can be limited, designs can be emailed and video conference can take topographic point from anyplace in the universeNew machines such as the Vetigraph system which enables cut forms and makes it accurate and cost efficient as it minimises waste of clothAfter this PEST analysis it shows a balanced side of the advantages and disadvantages of the hazards and chances to travel abroad for DS Fashions Ltd, considered in the concern environment externally. However even though these environmental hazards have been established it is still necessary to make a SWOT analysis on international enlargement scheme that could impact the strategic program being implemented, that is why the scheme needs to be assessed DS Fashions Ltd SWOT is illustrated below.SWOT on DS Fashions Ltd StrategyStrengthsAd to a new marketBigger market portionAttracting new clientsOffering something locals cantFailingsDifferent civilizationDifferent manner tendenciesCompeting with tonss of others rivals in India demand to set upOpportunitiesCheap distribution costsCheap laborLarger work force with lower monetary value which means mass productionsQuality control which gives good competitory borderMenacesLarge rivals such as Primark and Matalan has a bigger market portion and negociate better trades as they mass produce garmentsDeadlines might non be met on clipOther companies puting up concern in India for manner tradeThe analysis clearly outlines positive and negative results on the scheme but the scheme looks more promising for the hereafter, traveling to India would be a positive result.

As the scheme was a manner of DS Fashions Ltd to spread out to India which could be more cost efficient for them. The SWOT analysis suggests by making this they can infiltrate a new market and could take a large market portion of the manner industry. Besides it suggests by spread outing to India they will be able to bring forth larger measure of garments, utilizing high quality stuffs and cloths. As they will hold a larger work force they will be able to bring forth garments that need more labour in production, because they will hold a bigger and more powerful work force they will hold a bigger bend around period therefore pulling more clients. One of the failings that the SWOT picked up was the difference in civilization, nevertheless it can besides be seen as strength because they could spread the two different civilizations and make a new market, or they could besides supply to the smaller minor Asian community within the bigger British western community, therefore bring forthing garments to provide for different civilizations within the UK and other possible distributers.

Opening the production unit in India would intend that they would acquire cheaper labor ; therefore they would be able to put more into the quality of the cloths and the quality of the labor, so they would be bring forthing garments of a more higher criterion, so they may besides be able to come in a higher degree market within the manner industry. Another good factor is that they will be making more occupations in the Indian community.Michael Porter came up with a construct of a value concatenation ; this concatenation was made to include the maps which would give nucleus competencies over its rivals. The links with providers are referred to as upstream linkages and the distributers and clients are downstream linkages.

Different administrations have different value ironss. Tesco will hold a different value concatenation to Comet the electrical goods retail merchant. Having an analysis of the value activities helps the administration place where there is possible, happening this out they can alter activities and better the manner they are run. The manner it is analysed is non in isolation but with external linkages excessively such as distributers and providers.

Primary Activities

Inbound

Logisticss

Operationss

Outbound Logisticss

Selling and Gross saless

Servicess

Efficientlinks toprovidersMerchandises.LargeCargos,monolithicwarehousesMass production to work economic systems of graduated table andexperienceeffects to cut production costsChoice of majority orbig order low cost bearers.

Tight controls on stock list degreesSmallpublicity oradvertisement.Merchandisespriced togeneratebig gross revenuesvolumeModest aftergross revenues serviceandcare.As you can see above these are the primary activities of the value concatenation, this in relation to DS Fashions Ltd, will hold the same construction. Now we will look at the support activities.

Support Activities

Infrastructure

Human Resource Management

Technology Development

Procurement

“ traditional ” centralised managerialmanner with formal processs and stiffhierarchy: accent on cost controlIntensive preparation to stress costeconomy: encourage employees to lookfor new ways to better methodsEconomies of graduated table of R & A ; D andengineering development: procedureinventionSeek low cost providers, usage size inbargaining with providers

The Risks

Excessively much distinction

Buyers become better informed

Dilution of trade name designation

Prolonging perceived peculiarity

Offeringmore characteristics than clients desire, particularly if this is reflected in a premium monetary valueDemand becomes more monetary value medium, which limits any monetary value premium that may be chargedOffering lower priced product-line extensions may adversely impact quality trade name imageImitation and merchandise betterment by rivals, or alterations in consumer gustatory sensations, or alterations in engineering can all sabotage a distinction scheme

Decision

After looking at DS Fashions Ltd scheme it is rather clear that it is a really positive move frontward. This international enlargement has been good for the company every bit good as the consumer and besides the workers. Lodging to their ethical and environmental efficiency DS Fashions have scrapped the image of traveling to India as a “ perspiration store ” and “ fetching advantage of labor ” to a just manner.

Everything has been taken into consideration for this international move and the benefits and wagess are large.