Analysis of International Growth Strategies for Cotton On: India and UK

This report analyses the international growth strategies of Cotton On in India and UK based on PESTLE framework, geo-political scenarios, and trade policies. The report concludes that India is the most suitable market area for the company.

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Name of the Student
Name of the University
Author Note

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Executive Summary
This report is built on the analysis of the international growth based strategies which
have been made by a company. The company that has been selected for this
analysis is Cotton On. Cotton On is a retail clothing based organization that operates
in Australia. The countries which have been thereby considered for the analysis are,
India and the United Kingdom. The external environment based factors of the two
countries have been analysed with the help of PESTLE framework. The geo political
scenarios of the countries have also been analysed in the report in detail. The trade
and business based policies that have been developed by the two countries are
important parts of analysis. The report has been concluded by stating that the most
suitable market area for the company is India which is an emerging area and can
provide huge opportunities for growth to the company.

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Table of Contents
About Cotton On................................................................................................3
Identification of the countries where Cotton On can enter................................3
Analysis of the countries....................................................................................3
Macro-environmental analysis of India..............................................................3
Geo-political analysis of India............................................................................5
About the business and trade based policies of India.......................................5
Risks and opportunities provided by India.........................................................6
Macro environmental analysis of the United Kingdom......................................6
Geo-political analysis of the United Kingdom....................................................7
About the business and trade based policies of the United Kingdom...............7
Risks and opportunities provided by the United Kingdom.................................8
Conclusion.........................................................................................................8

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About Cotton On
Cotton On is an Australian retail organization which operates in the fast
fashion based industry and is known for providing clothing based items for women,
men and teenagers. The company operates more than 1000 stores in more than 12
countries all over the world. Cotton On also possesses an employee base of around
17000 staff in the country and in other areas of its operations. The different brands
which operate under the name of Cotton On thereby include, Cotton On Kids, Cotton
On Body, Typo, Rubi Shoes, T-bar, Typo. The company was established in the year
1991 and the first store was established in Geelong, Australia. The retail chain has
been able to immense growth in the industry with the help of its numerous stores all
over the world (Cottonon.com 2018).
The production based process of the company is thereby controlled in an
active way with the help of the design based team of the company. The analysis that
will be made in the report will thereby be based on the growth based operations that
can be developed by the company. The report will thereby be able to provide a
detailed analysis of the countries where the company is aiming at expanding the
operations (Cottonon.com 2018).
Identification of the countries where Cotton On can enter
The two countries which have been selected from the mentioned continents
are the United Kingdom from Europe and India in Asia. These two countries have
been chosen on the basis of the ways by which the company can effectively increase
its levels of profitability. The revenues and worldwide presence of Cotton On will also
be increased with the help of expansion in these two countries. The increase in
number of factories will also help in speeding up the process effectively. The growth
of the organization is thereby hugely dependent on the ways by which it is able to set
up its operations in the new areas (Adekola and Sergi 2016).
Analysis of the countries
Macro-environmental analysis of India
The external environment or macro environmental analysis can be done in an
effective manner with the help of PESTLE framework. This is able to provide a
detailed picture of various factors which are able to affect the operations of

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companies which plan to enter in these areas. The PESTLE analysis of India will
thereby be done in order to decide the methods by which the organization can
function in the country in an effective way. India has attained the second largest
place in the world based on the massive levels of population and size of the
democratic country. The economic sector of the country is able to contribute in an
effective way to service sector. The large population of the country is an important
factor which adds to the growth of the nation (Andersson et al. 2016).
Political factors – India has a strong political system and many parties take
part in the political activities. Different elements are present in the environment which
include the ideologies of various political parties. The taxation based system which
has been developed by the country is highly developed in nature and taxes are paid
by the people in a highly systematic manner. The setting up of business operations
of Cotton On will be easier in case of a stable political environment (Buckley 2014).
Economic factors – The economic situation which thereby prevails in the
country is based on the interest rates, inflation, changes in taxation and the
exchange based rates as well. The various industrial reforms were thereby
introduced in the year 1991 which had led to the proper liberalization of the entry of
foreign capital in the country. The economic environment of India has improved with
the help of proper foreign investment. The GDP of the country had reached to 5.07
Trillion Dollars in the year 2013. The growth also improved by 5% in the year 2015
as compared to 4.35% in the year 2013. The buying based capacities of the
customers have increased in an effective manner with the help of stability and
improvement of the economy (Davis 2014).
Social factors – The major social factors of India mainly consist of different
social trends and the changes which have taken place in the different values,
traditions, lifestyle, customs and the features. The religious values are provided with
huge value in the country. Different norms of which are a part of the society mainly
include, the distribution of income, population demographics and attitudes towards
work. The Indian labour market is thereby affected by the index of social
development. The choice of consumers thereby need to be analysed by the
company effectively in order to satisfy their needs (Dimitratos et al. 2016).

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Technological factors – India has been able to make high levels of
advancement in the technologies and has also prepared new types of products
which have been effective in the market. The 3G and 4G based services have also
played a major role in the development of technological environment of India. The
new services and operations have thereby led to the innovation in technological
capabilities. The improvement of technologies will play a significant part in the online
operations and delivery based options of Cotton On.
Legal factors – The government of India has introduced huge number of
legal changes with the aim of reducing the levels of discrimination. The legal
changes are able to affect the demands of the products and the costs of production
of Cotton On (Fainshmidt, White and Cangioni 2014).
Environmental factors – The environmental factors have to be faced by the
country due to changes that have been seen in the external climate. Global warming
has proved to become a major issue for the impact that is caused on the industries.
The production based operations of Cotton On will be able to affect the external
environment and changes in climate of India.
Geo-political analysis of India
The geo political reach of India has played a major role in the favourable
investment based position of the country. The most important part of the geopolitics
is thereby based on the cooperation that has been extended by India towards other.
The geopolitical expansion of the country has however faced some major obstacles
based on the proper spread of global influence. India has thereby aimed at
increasing its geopolitical reach in an effective manner with the help of the proper
implementation of three-pronged strategy. The increase of geopolitical as compared
to that of China will be able to provide proper opportunities to Cotton On (Fernhaber,
Gilbert and McDougall 2014).
About the business and trade based policies of India
The increase in the international trade based operations have increased in the
current business based environment. The trade and external sector of the country
has a huge impact on the expansion and per capita based income of India. The
foreign direct investment has also increased in India in the past few years. The

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external sector of the country has been able to affect the economy in a huge
manner. The trade facilities which are provided by the country will offer huge
opportunities to Cotton On for its expansion based plans (Jaef and Lopez 2014).
Risks and opportunities provided by India
The major risks that can be faced by Cotton On in its operations in India are
based on the political issues which can occur at the time of its entry in the retail
sector of the country. The lack of political stability can act as a major issue in the
operations of the company.
The opportunities that are provided by the country are based on the trade
related environment which is available for the company. The huge number of buyers
and booming market is also a major opportunity or the company in India (Khan,
Shenkar and Lew 2015).
Macro environmental analysis of the United Kingdom
Political factors – The study of the political environment of the United
Kingdom is able to depict that stability is an important part of the political operations.
UK is also considered to be one of the most powerful countries in the world. The
debates and issues which have taken place after the implementation of Brexit has
been able to affect the political stability. The country has been attractive destination
for foreign direct investment which is a major opportunity for Cotton On in the market
(Knight and Liesch 2016).
Economic factors – UK is also considered to be in the fourth position with
respect to the size of its economy. The recession which had occurred in the year
2008 was however able to affect the economy in an adverse manner. The British
households have also faced major challenges in the year 2017 due to rise in the
prices of different products. The instability which has been detected in the economy
will affect the proper operations of Cotton On (Leonidou et al. 2015).
Social factors – The consumer market which has been developed in UK is
huge. The data which was released in the year 2017 had been able to prove that the
population of the country had risen to 65.6 million in the year 2016. The huge

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population of the country will further lead to increase of number of customers for
Cotton On.
Technological factors – The technology sector of United Kingdom is highly
advanced in nature. The sector based on technology is an important contributor to
the economy of the country. Cotton On will be able to increase its technological
capabilities with the help of the developments which have occurred in the United
Kingdom.
Legal factors – The legal landscape of England is effective in nature. The
equality based acts that have been implemented in the country will be able to affect
the policies that will be developed by Cotton On in an effective manner (Meyer
2017).
Environmental factors – The economic activities are able to influence the
environment of the United Kingdom. The local councils, charities and the
newspapers have taken many initiatives in order to increase the levels of
environmental awareness in the United Kingdom. The challenging weather
conditions which have occurred in country can affect the ways by which Cotton On
can plan the production based operations in an effective manner (Nowiński and Rialp
2016).
Geo-political analysis of the United Kingdom
The exit of United Kingdom from the EU has led to huge amounts of changes
in the geo-political environment. The geo political stages have been affected by the
withdrawal of UK from the European Union. The alliance which was made between
the European countries have been effective for the formation of trade based policies.
The exit will affect the relationships and geo political stages of the United Kingdom in
an adverse manner. This will play a key part in the methods by which the Cotton On
will develop effective policies in order to operate in the country (Semrau, Ambos and
Kraus 2016).
About the business and trade based policies of the United Kingdom
The trade policies which are followed in the United Kingdom will affect the free
operations of Cotton On. The retail industry of UK has to face lower trade based
barriers which is a major growth opportunity for Cotton On.

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Risks and opportunities provided by the United Kingdom
The major risks that Cotton On can face in its operations in the United
Kingdom are based on the economic instability that has occurred in the environment
due to the implementation of Brexit. The lack of stable economic condition will be
able to affect the increase of the sales and revenues of Cotton On.
The opportunities which are thereby provided to the company are based on
the technological environment of the country. Cotton On can use the advanced
technologies in order to implement online operations in the UK (Rohlfer and Zhang
2016).
Conclusion
The country that can be chosen by Cotton On in order to expand its
operations is India. The major opportunities are thereby provided by the booming
retail industry of the country. The retail industry has thereby been able to provide
huge levels of opportunities for the growth of the company and increasing its levels
of reach as well. The variety in the society of India will also play a major role in
increasing the profitability in an effective manner. The company will thereby be able
to expand its customer base effectively by using the opportunities that are provided
by the country.

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