Expansion Business Proposal

Running head: EXPANSION BUSINESS PROPOSAL
Expansion Business Proposal
Name of the Student
Name of the University
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2EXPANSION BUSINESS PROPOSAL
Table of Contents
Introduction......................................................................................................................................3
Reason for expansion.......................................................................................................................3
Market exploration of Bangladesh...................................................................................................4
The growing economy of Bangladesh.............................................................................................4
SWOT analysis of Bangladesh........................................................................................................6
Market Entry Strategy......................................................................................................................6
Penetration Pricing...................................................................................................................7
Joint venture with Grameen Bank...................................................................................................7
Benefits and challenges...............................................................................................................7
Benefits....................................................................................................................................7
Challenges................................................................................................................................8
Conclusion.......................................................................................................................................8
REFERENCES................................................................................................................................9

3EXPANSION BUSINESS PROPOSAL
Introduction
H&M has been recognised as a company who have been successful in establishing a
global market presence as a result of their highly fashionable products. The headquarters of the
company is in Stockholm, Sweden and their company was founded in 1947 by Erling Persson.
The company have been successfully established in approximately more than 4,500 locations
worldwide and they mainly carry out their business through retail outlets. The company mainly
deals with apparel and fashion accessories. The current owner of the company is Stefan Persson.
The company has been successful in entering foreign markets as a result of collaboration,
partnerships and joint ventures that they have been carrying out in the international market were
they have been established. The company have global presence however, they have not been able
to establish themselves in Bangladesh which has been recognised as one of the fastest developing
economies of the world. Thus, the aim of the paper is to judge the market conditions of the
country in order to establish an expansion plan of the company in the country.
Reason for expansion
H&M have been successful in gaining market share all over the globe. They have been
able to implement successful strategies in order to sustain themselves in the market. Bangladesh
has been recognised as a country who have been subject to expansion in a rapid rate. Hence,
expanding into the market of the country provides favourable options to increase the returns of
the company. Furthermore, it can be said that Bangladesh are the leaders in export of textiles all
over the world. Thus, establishing the company in the country is supposed to turn out profitable
for the company as they will be able to source raw materials at a cheaper rate than the company
would be able to do if they were operating form other countries. H&M have established market

4EXPANSION BUSINESS PROPOSAL
presence in India, the neighbouring giant of Bangladesh. However, the existence of competitors
who offer similar products at subsidised rates made life difficult for H&M despite the abundant
availability of raw materials in the country. The favourable market trends in the country have
been recognised as the reasons as a result of which the expansion plan has been taken up by the
company. Establishing the company in Bangladesh will not only provide favourable supply
options for the company, it will also help the company in generating turnover that will help in
satisfying the needs of the stakeholders of the company.
Market exploration of Bangladesh
Bangladesh is country that has been subject to fast economic growth over the past
decade. The textile industry in the country has been one of the industries that the country has
been huge distance apart from other companies. The aim of H&M is to explore the abundance of
the material that are available in the country. Furthermore, the cheap rates at which the raw
materials are available make the company suitable for expansion for companies who are
operating in the apparel or the textile industry. Companies all over the world have been
importing textiles from the country as a result of the cheap rates of the textiles that are available
in the country. However, the countries that the countries are established in have import rates that
the companies have to incur in order to source the materials. Thus, establishing branches in the
country has been the rationale behind the market exploration plan of the country in the
Bangladesh. The latter is the best was to reduce the rates that the companies are subject to while
sourcing materials from a country such as Bangladesh.