International Business: Analysis of Burberry's Expansion in Singapore

This report analyses Burberry's expansion in Singapore, including the reasons for international expansion, PESTLE analysis, Ansoff matrix, entry method, marketing strategies, and managing human resources.

International Business

Executive summary
In this report, it has analysed that international business involves designing products and
services in the way which serves the need and wants across the boundaries. It involves the
reasons why businesses go international. Strategic planning and decisions were made to set up
the business in different countries. The external and internal factors of business environment was
analysed through various techniques and methods like PESTLE analysis, Ansoff matrix, entry
method, marketing strategies and managing human resources.

Table of Contents
Executive summary .........................................................................................................................2
INTRODUCTION ..........................................................................................................................4
MAIN BODY...................................................................................................................................4
About the business organisation and rationale for going international.......................................4
Analysis and discussion...................................................................................................................5
Country to be entered and the rationale behind the decision ....................................................5
Strategy for internationalisation..................................................................................................7
Specified target market...............................................................................................................8
Entry method...............................................................................................................................9
Marketing strategy ...................................................................................................................10
Managing operations and managing human resources. ...........................................................10
Recommendations..........................................................................................................................11
CONCLUSION .............................................................................................................................12
REFERENCES:.............................................................................................................................13
Books and Journals...................................................................................................................13

INTRODUCTION
Internationalization means production of products and services to fulfil the needs and
demands of customers across the boundaries. It involves expansion of business like creating
online websites which increases the engagement of customers from different nations (Boddewyn
and et.al., 2021). It includes adding new features and innovation which attract people from
different regions. This report is based on Burberry. It is a fashion house started in 1856 by
Thomas Burberry headquartered in London, England. It designs products like ready made
clothes, leather goods, fragrances, footwear, etc. It develop quality products which are preferred
by people all over the world. This report includes business organisation and reasons for their
international expansion. Burberry is planning to expand its business in Singapore. The
appropriate analysis of Singapore's environment is carried out in this report so that they can
reduce the upcoming risks. To increase profits and revenues in international market, various
strategies are implemented so that they can focus on targeted market without any difficulties.
MAIN BODY
About the business organisation and rationale for going international
Burberry is global fashion brands which is known for it's luxurious products. It produce
high quality products and its first shop was opened in London in 1891. They use unique fabric
and material which make their products different from its competitors (Zhang and et.al., 2020).
Their trench coats becomes fashion icon all over the world because the material is breathable,
durable and lightweight which is preferred by most of the population. They also have online
presence, people can easily shop through online websites which save their precious time. Their
online website continuously add new and exciting products which creates positive impact on
people for their brand. Burberry is planning to expand its business in new country. It will benefit
their business in profit maximization and provide growth exposure. Entry in new market
generates new customer base which built the reputation of company in global world. Expansion
brings the opportunity of economies of scale because Burberry expand its products line to cater
the needs of large customer base. They attract new talents and generate employment for skilled
and educated people who are located in different countries. Expansion in global marketplace
increase the sale and productivity of the business by serving large customer base. It helps in
diversification of business so that they can produce number of different varieties of products.

Expansion helps Burberry in minimizing the risk of competitors because they operate in different
countries which help them to know the needs and preferences of customers. With the expansion,
business generates new investment opportunities which results in development and growth.
Analysis and discussion
Country to be entered and the rationale behind the decision
Burberry is expanding its business in Singapore due to some reasons like Brexit.
Singapore is located in the south-east Asia with highly advanced infrastructure. Their business
policies are very flexible which can be adaptable easily. It has most simple and rational taxation
policies. Their political and economical conditions are stable which results in smooth operations.
Corruption and frauds percentages are slightly lower with better rules and regulations makes
Singapore best place to start business. Burberry is planning to launch their store in Singapore
with an aim to cover its clothing line. The taxation system and corporate tax rates are very
friendly and affordable which makes Singapore first choice for business. It also offers productive
and skilled employees which are known for their smart work, technically effective, highly
educated and hard working behaviour which creates expertise in business world. Burberry also
believes that their fashion products are preferable by the population of Singapore because they
demand luxurious products as they live top quality lifestyle.
PESTLE analysis
It is the framework which identify the macro and micro external factors of business
environment. Risk factors which are under control can be eliminated by PESTLE analysis.
Before the expanding the business, Burberry analyse PESTLE factors of Singapore:
 Political factors: This includes the factors like tariffs, trade restrictions, bureaucracy and
tax policies which plays major role in the operations of business (Viswanathan and et.al.,
2019). Since the political environment of Singapore is quite stable which is positive
factor for Burberry. To carry out smooth operation every business demand friendly and
affordable tax rate which results in higher revenues. The impact of political factors could
not hamper the profitability of Burberry.
 Economic factors: Factors such as saving rates, foreign exchange rates, inflation rate and
interest rate determine the business performance and operations. Singapore's per capita

income is higher which is beneficial for businesses. The corruption rate of Singapore is
slightly lower which assist organisation. They have best and upgraded infrastructure
which enhance the quality of products and services. Burberry is launching its clothing
segment in Singapore which can acquire market easily because the lifestyle of people
demand high class and luxurious products.
 Social factors: Demographic trends and cultural related factors are part of social factors.
It also includes age distribution, career attitudes, perception, health consciousness and
interest of people. These factors plays major role in sales and distribution of the
company. Burberry targets young age segment for its clothing line as they follow latest
trends which is positive factor for Burberry. The purchasing power of the majority of
population is higher which will increase the demand of luxury products of Burberry.
 Technological factors: These factors help organisation in upgrading infrastructure and
creating new ideas to attract large customer base (Purba, 2022). These factors include
research and development, technological incentive, change in technology, etc. Singapore
has high tech infrastructure which assist Burberry in making trendy and fashionable
clothes. The employees and workers possess skills which will benefit Burberry in profit
maximization.
 Legal factors : These factors regulate the legal aspects of the environment like licences
and permits, industry regulations, labour laws and intellectual property. Some of the legal
laws are formulated by Singapore to minimize the negativity in context to business like
discrimination laws and antitrust laws. Burberry enjoys freedom in operations because
they follow peace and harmony among the country. Singapore government also give
patents and copyrights which can be used by Burberry so that no one can copy their
products and services
 Environmental factors: Factors which impact business environment ecologically refers
to environmental factors. These are temperature, pollution, climatic changes, weather
conditions and natural disasters like tornadoes and tsunami. Singapore is well known for
its cleanliness and attract people toward its beautiful environment. Pollution level was
increased in due to commercial activities but government takes various necessary
precautions to decrease that. Burberry should also take care about that and formulate
strategies which will reduce pollution during manufacturing products.

Strategy for internationalisation
Businesses which operates across the boundaries formulate some strategic decisions for
effective and efficient operations (Zhu and et.al., 2019). There are major four strategies for
internationalisations which are:
 International strategy: This strategy focus on production in their own country and
export products and services in different countries. In this strategy, business does not
invest in human resource and infrastructure in foreign countries.
 Multi-domestic: In this strategy companies make changes in its existing products and
invest in foreign market to set up their business across the boundaries. Burberry is using
this strategy because they are launching their store in Singapore to target a particular
segment.
 Global strategy: This strategy focus on the local requirements of the products and
services to lower the costs of production. This is opposite of multi-domestic strategy.
 Transnational strategy: Businesses using this strategy maintain balance between low
cost and serve the needs in various countries.
Ansoff Matrix
The Ansoff Matrix is a tool developed by Igor Ansoff. It is also known as product or
market expansion grid. This grid shows four strategies which help organization grow and also
analyse the risk factors (Rodwin, 2020). It comprises of market penetration, market development,
product development and diversification. This help many marketers understand their business
environment which results in better growth. The four strategies of Ansoff Matrix in relation to
Burberry can be explained as:
 Market penetration: In this strategy, organization focus on expansion of sales of
existing product in existing market. It focuses on finding more new customers in existing
market. Organization may achieve market penetration by decreasing the prices of
products, by increasing promotional activities for sales, improve the product quality to
acquire market and by reaching more customer base which regulates distribution
process.

 Market development: This is the second strategy with slightly higher risk then market
penetration. In this, organization target different or new geographical areas to sell its
existing products. Organization can reach different consumer sectors, they can expand
their market internationally to capture new age groups or gender who can use their
products. Organization can change their distribution channel and can approach targeted
segments across the globe. Market development strategy will be used by Burberry. The
company is planning to expand the market and establish stores in Singapore.
International expansion helps them to achieve their goals and targets. Offering products
in new geographical areas help organization to grow faster. They can take benefit of the
company and its operations by reaching more and more customers.
 Product development: In this strategy, organization offers different products to the
same customer base (Mu, 2021). To increase the sales, organization creates new products
or offers new variants of existing products. This involves research and development to
serve new product range in the market to meet the needs and wants of the customers.
 Diversification: This is the last strategy and most riskiest one among all other strategies.
This strategy mainly used by new start-up organizations because in this they offer new
products in new market segments. This strategy may give higher returns because they
have more growth exposures which results in high revenues.
Specified target market
Selecting the potential customers is one of the important step undertaken by business
organisation (Regent and et.al., 2019). There is need of carrying on research so that the potential
customers are identified. The company must know about the right set of customers as it assists in
providing them effective services. The use of STP model will help to know about the target
market for Burberry:
Segmentation: It is the process of dividing the homogeneous population in
heterogeneous groups according to their taste and preference. It is important to understand the
needs and wants of the customers and group the similar customers. Market segmentation can also
be defined as the small divisions of the single market. Small segments are created to cater the
needs of different segments according to their needs. It can be done according to the gender,
region, age and lifestyles. Various basis of segmentation includes demographic segmentation,
geographic segmentation, psycho graphic segmentation, behavioural segmentation.

Targeting: It is seen that the target market of Burberry is set according to demographic
segmentation, The company targets on the basis of income and high class and middle class
income people are being targeted for their products. At the same time, the age group of
customers is also considered and men and women of age 20 to 45 years are being targeted.
Positioning: It is the last step which tells on which the product is positioned. It is the
review of customers regarding the products (Santri, 2021). It is the image of the company in the
minds of customers. It is seen that Burberry has established positive image and they are seen as
one of the leading fashion brand that provides luxury products.
Entry method
There are various routes to entry in international market. When the company decides to
expand its operations in global business, they have to analyse the present risk and then select the
best route for entry. Below is discussion related to the market entry routes:
 Export: It can be defined as cross border sale of domestic products. In this strategy, the
business organisation has no exposure to the foreign market (Lazaris and Freeman, 2018).
The business organisation just sells their goods in the foreign market. The option has low
risk and is an indirect way of entering the global market. The company is able to reach
the markets with less risk and serve the customers of the foreign market.
 Licensing: It is a cross border agreement in which the company grants license to the firm
in other country to carry on the operations. The licensee in the return has to pay fee in
exchange for the rights they are using. They are able to sell the products of the company
in international market with the license. The use of licensing as marketing strategy can
reduce the potential profit of outright ownership. Along with that, it can reduce the brand
image of the company due to lack of control over the licensee.
 Franchising: It is another strategy of entering the foreign market. Herein, semi-
independent business owner pays fees and royalty to the franchiser to use the trade mark.
The terms and conditions are based on the agreement and the the same business is started
in the foreign country. There are chances of diminishing brand image if the franchisee
does not work in effective manner.
 Joint Venture: In this strategy the business organisation joint hands with a firm in
foreign market and enters the business. Both the organisations have common objectives
and they share equal risk. The business organisation does not need to carry on research

related to foreign market. The joint venture already has operations in the market and they
are able to know about the competition and need of customers therein.
 Wholly owned subsidiary: The company enters the market and start their own business
in the foreign country (Zolberg, 2019). The business organisation has to set up their
business according to the laws and legislations of the global country. This entry strategy
will be used by Burberry in order to enter the Asian market. The company will start their
own business in Singapore. All the risks and uncertainty is faced by the company and
they are responsible for the profits. By analysing the market of Singapore, Burberry has
taken the decision.
Marketing strategy
By checking the marketing mix of the business organisation, the strategy followed by
them can be evaluated (Mutcherson, 2018). It helps to know about the combination of aspects
that are followed by company for their growth and success.
Product: Burberry has diversified product portfolio that includes ready to wear,
including trench coats, fragrances, footwear, fashion accessories, leather goods eye wear, and
cosmetics. The company is coming with their clothing line at the time of entering international
market. The company is famous for serving the customers with quality products.
Price: Burberry uses premium pricing strategy as it is a luxury brand. The company will
use the same strategy ans will serve the high income class customers. It will help them to
maintain their brand image.
Place: The company has effective channels of distribution and that help them to reach
more customers. At the time of expanding their business in Singapore the company will start
their physical stores and online stores to reach more customers.
Promotion: The promotional strategy used by Burberry includes TV, online ads, print
ads, billboards etc. The company understands the importance of the social media and uses the
same in effective manner in order to attract the customers in new market.
Managing operations and managing human resources.
Operations play a major role in success of the company. By managing the operations,
business organisation is able to provide quality products to its customers (İpek, 2020). Burberry
manufactures the products by their own and it helps them to keep track on the quality. They have
skilled people that help to decide the design of the process and reach the right customers. The use

of total quality management helps Burberry to minimise wastage of materials and usage of
resources in effective manner. The company has network with global suppliers that help them to
reach the customers in effective manner.
The human resource management is one of the integral function of the company. The
HRM of Burberry works to hire skilled and talented staff members that are able to manage their
work (Czerny and et.al., 2021). They maintain good working conditions and provide positive
work culture that respects diversity. It helps the company to manage the employees in effective
manner. The HRM of Burberry provide proper training to the employees and prepare them. Also,
all the issues faced by the employees are being solved by the HR of company.
Recommendations
 Burberry must analyse the external environment of Singapore in effective manner before
entering the market. The use of effective research will help them to take wise decision.
 The political and legal structure of the global market must be followed so that they are
able to enhance their operations effectively. The right strategy to enter the global market
must be choose by the business organisation.
 The company must take care that the employees are being provided effective and
comfortable working conditions. All the employees must be treated in positive manner
for success and growth of the company.

CONCLUSION
From the above report, it is concluded that the business environment is dynamic and it
keeps on changing. To compete in the market there is need to conduct regular research. In this
report, the new area to start the business is being analysed and the evaluation of the place is
done. Afterwards, the strategy for the entering new market is being mentioned. The marketing,
operations and human resource management strategies at the time of entering new market are
evaluated. In the end, recommendations are mentioned for successful expansion of the business
organisation.

REFERENCES:
Books and Journals
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Czerny and et.al., 2021. Post pandemic aviation market recovery: Experience and lessons from
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İpek, İ., 2020. The relevance of international marketing strategy to emerging-market exporting
firms: from a systematic review towards a conceptual framework. International
Marketing Review.
Lazaris, M. and Freeman, S., 2018. An examination of global mindset and international market
opportunities among SMEs. International Studies of Management &
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Mu, P., 2021. Kinabatangan tourism depends on international market. New Straits Times.
Mutcherson, K.M., 2018. Things That Money Can Buy: Reproductive Justice and the
International Market for Gestational Surrogacy. NCJ Int'l L., 43, p.150.
Purba, G., 2022. Mini hydropower as a decentralized renewable energy provider for developing
markets–a screening stage of international market analysis.
Regent and et.al., 2019. Improvement of strategic management of a tourism enterprise in the
international market. Journal of Environmental Management & Tourism, 10(3 (34)),
pp.427-431.
Rodwin, M.A., 2020. Average international market pricing for us pharmaceuticals—lessons from
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Santri, L., 2021. ANALYSIS OF TUNA COMPETITIVENESS OF ACEH PROVINCE
(INDONESIA) IN INTERNATIONAL MARKET. Russian Journal of Agricultural and
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Viswanathan and et.al., 2019. Factors influencing international market selection for Indian
construction firms. Journal of Management in Engineering, 35(5), p.05019006.
Zhang and et.al., 2020. Forecasting the Chinese stock market volatility with international market
volatilities: The role of regime switching. The North American Journal of Economics
and Finance, 52, p.101145.
Zhu and et.al., 2019. Time-varying international market power for the Chinese iron ore
markets. Resources Policy, 64, p.101502.
Zolberg, A.R., 2019. Bounded states in a global market: The uses of international labor
migrations. In Social theory for a changing society (pp. 301-335). Routledge.