Global Marketing Strategy Case Study

This assignment focuses on analyzing global marketing strategies using a case study approach. It examines the work of IKEA, referencing sources such as Chary (2006) and Hay (2006). The analysis incorporates various concepts from strategic marketing management, including international marketing by Czinkota (2012), market-led strategic change by Piercy (2012), and global business strategies as discussed by Mathur (2011). Additionally, the assignment touches upon rebranding in mergers and acquisitions, drawing from Muzellec (2008).

GLOBAL MARKETING

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................1
International Market Screening and Selection by using GE matrix.......................................2
Global Marketing strategy......................................................................................................6
Market entry strategies:.....................................................................................................8
Strategic Marketing Policies..................................................................................................8
CONCLUSION........................................................................................................................10
REFERENCES.........................................................................................................................11

LIST OF FIGURES
Figure 1GE Nine Cell Matrix.....................................................................................................5
Figure 2 Ansoff Growth Matrix.................................................................................................9

INTRODUCTION
In today’s highly competitive environment majority of firms are trying to expand their
business. For this, there are various strategies adopted by them in order to attain higher
competitive advantage. Most of them are adopting the option of global marketing in which
they can sell their products internationally. It involves the total process of planning,
producing, placing and promoting company’s product in worldwide market (Craig, 2008).
Global marketing is highly important for those firms that provide products and services
which are having universal demands. In this regard, the present study is based on the global
marketing plan of 2 countries that are planning to expand their business operations globally.
For these particular study two countries at different levels of Gross National Income has been
selected. In this UAE and South Africa is taken into consideration in which UAE comes
under the category of high income countries while South Africa comes under the category of
upper middle income. These countries has been selected as per the given economies that are
divided according to Gross National Income per capita, calculated by using the World Bank
Atlas and other methods. For this particular countries clothing has been selected in which
traditional clothing is the major concern (Hartline, 2007). In this concern, appropriate
marketing plan is being developed on the basis of market expansion of clothing sector within
UAE and South Africa. Clothing is products which is highly culturally sensitive ad demand
and needs have people are different as per their culture and traditions. The overall business
development plan in both the countries includes the international market screening as well as
selection by using General Electric Matrix or various other portfolio strategic matrices.
Appropriate marketing mix is going to be proposed with having proper market entry
strategies. These are the best way to set the global marketing strategies through which
clothing firm can easily respond to the most important threats and opportunities they might
face while expansion. Further, it can be stated that this overall study helps in expanding
business of clothing firm Urban Outfitters. It is an American multinational clothing firm
which operates their business operations in different countries such as United State, Belgium,
Canada etc. The company is known for its vintage and humorous clothing and carried out
multiple street brands at its 400 global retail location. Company is ready to come in UAE and
South Africa (Proctor, 2014). In this concern, 2 major factors which affect their business
planning are internal as well as external factors. In order to shape appropriate competitive
factors majority of key factors which helps are internal as well as external factors.
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An internal factor covers the level of commitment of companies as well as their
international experience and flexibility. On the other hand, external factor covers the overall
market size, market growth, government regulations as well as level of competition etc.
These are the major factors which highly affects the overall expansion of urban outfitters in
these countries. The intensity of competitive rivalry in UAE is the very high as Dubai is in
the list of world’s best shopping destinations.
The demand for fashion industry has increasing rapidly during the last decades and
South Africa is another best place to come up with new international clothing brands.
According to a recent Economic Intelligence Unit (EIU) “Africa is open for business” In
order to shape the competitive structure within this country one of the most affective factor
for urban outfitters are the youth culture (Aspara, 2007). This can be defining as a critical
driver of opportunity for fashion retailers in Africa. There are majority of Youngers and
middle class people moving away from traditional clothing and going for more contemporary
styles.
International Market Screening and Selection by using GE matrix
While going through the market screening and selection it has been founded that UAE
and South Africa are two best choices that have ever made by fashion retailers.
South Africa: This is a country of the African continent market by several
ecosystems. There is a more evaluation to come within the fashion market of South Africa. It
holds up a skewed mirror o its vibrant and complex society. In the year of 2013, clothing and
textile industry is to use all the natural and technological resources and make it the preferred
international supplier of apparel (Glynn, 2011). This market has been selected due to the
declining poverty in Africa and a small slice of continent’s population can afford high
consumer goods. There are several reasons due to which Urban Outfitters can come up for
expansion. Under this, it is being founded that western fashion is becoming very popular
within the younger generation. It is very clear that not all African countries are developed
equally except South Africa. Due to this factor, most of the international fashion retailers
have largely focused their efforts in South Africa (Chang, 2008).
UAE: It can be defined as a United Arab Emirates where the state of competition
within the fashion industry is very high due to the increasing needs of customers. One of the
major reasons for business expansion in UAE is that it comes under the list of world’s best
shopping destinations. Fashion retailers and wholesalers have contributed 16.6% of GDP in
the year of 2006. Another major reason for business expansion is that 3 of the world’s largest
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malls exist here (Hoppner, 2013). Urban Outfitters are coming up with the business planning
in UAE and with the help of GE matrix they are able to identify the future opportunities and
increasing competitive rivalry. It can be determine that there is a huge and increasing
competitive rivalry within the business area of UAE due to the high number of fashion
retailers. In UAE, Dubai has shown the positive growth of the economy due to its driver in
the retail sector which highly contributes about 30% of Dubai’s GDP. In this concern, there
are various international fashion retailers which have given huge competition to the
upcoming brands. During the global economic crisis, Dubai went through the tough period.
Majority of luxury goods companies have shown their interest in the UAE. Alongside, all the
opportunities UAE presented the high rate of challenges for all the new entrants (Terpstra,
Foley and Sarathy, 2012). Huge development of country and increasing foreign company’s
arrival in the country is becoming major threat. While the challenges of global financial crisis
also, overall fashion industry is highly affected. Due to this factor, the Dubai Mall welcomed
an impressive 31 million visitors in the very first full year of operations. These are similar
feature due to which UAE went on to become the world’s most visited shopping and lifestyle
destination. It has come under the top ranking of fashion capital marketing.
Whether these countries are an attractive opportunity or can be easily founded by GE
matrix. It represents various factors which help in identifying the industry attractiveness as
well as business unit strengths (Mathur, 2011). It helps the Urban Outfitters to go through the
current portfolio of their business unit as well as their position in comparison to others. Main
aim of this matrix is to go develop the growth strategies for their business plan and exploit
more future opportunities. With the help of using matrix, Urban Outfitters are able to make
appropriate decisions in a systematic manner. This matrix defines the factors which are as
follows:
1. Market attractiveness: South Africa is the most prominent place for developing
fashion trend due to the changing youth culture over there. Within the area of South
Africa there is a huge market growth within the clothing and fashion sector. Needs
and demands of customers are changing day by day (Czinkota, 2012). There are
various fashion and apparel retailers, initially slow to follow and have accelerated
their South Africa activities in the last years. Market probability can be identified by
the way of increasing demand of customers. Here, in South Africa youth culture is a
key factor of opportunity for the fashion retailers. All the middle class people are
moving towards the contemporary style and it is the main reason due to which market
is highly effective for the fashion retailers. In addition to this, market attractiveness
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can be measures by number of factors such as Market size, Market growth and growth
potential, Industry profitability, Competition, Market predictability, new opportunities
and Macro environmental and economic factors (Piercy, 2012). All these factors are
presented that there is a huge scope within the fashion industry. However, operating a
fashion retail store here is not so easy and it requires huge and challenging strategies
so that higher competitive advantage can be easily attained.
Within the area of UAE the availability of many international brands and fashion
collections are having direct results of the popularity of the franchise model. There are
various UAE laws and legal system which need to be addressed by different
companies (McLoughlin, 2009).
2. Business/Competitive strength: This is another most effective dimension which
presents the business strength of the company itself. It helps in exploring existing
competitive rivalry within the area itself. Business competitive strength can be
identified by total market share as well as strength if brand. Urban Outfitters is
always liked by majority of people and they are providing their services to women’s,
men’s, beauty etc. It is an American multinational clothing firm having its existing in
more than 400 retail locations. People are highly attracted towards this brand and
helps in enhancing more number of customers (Hartline, 2007). The major strength of
this brand is its diversified product style range as well as direct online selling. In this
way, it can be determine that there is vast opportunity for this retailer to go through
the global business expansion. It clearly represent that company is highly profitable
and maintain the product differentiation strategy in order to compete within this
competitive environment. In addition to this, business strength for this firm represents
its current market share as well as brand image and promotional effectiveness.
As per the concern of UAE, It can be determined that they are the true fashion capital
(Mathur, 2011). They highly influence the international fashion industry as per the
point of view of design, production as well as retailing. Further, the competitive
strength of the particular brand makes them stronger with the help of rapid expansion.
Urban Outfitters are able to survive in the market of UAE but it is quite difficult to
compete with the existing retailers of the country.
3. Measurement and plotting: It helps in identifying the size of market by drawing it
within the pie chart.
4. Investment strategies: After plotting the chart investment strategies can be created by
using three options i.e. grow, selectivity and Harvest (Das, 2011). Units in the
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category of Grow attract investment by the corporation as they are in the position to
bring high returns in the future. In this firm can possibly invest in the area of
advertisements as well as brand expansion. In addition to this, selectivity is another
business unit which presents a more ambiguous position and it shows the unclear
growth rate in the future (Harvard, 2002). Last strategy is Harvest in which units may
be poor performers and in less attractive industries and markets.
5. Identifying future direction of each unit: The present matrix itself only helps the
company in determining the current state of the industry. It also gives them
competitive direction rand indication for the future. There are different business units
of Urban Outfitters such as LEIFSDOTTIR, BHLDN and Free People etc. With the
help of setting their GE matrix they are able to identify the appropriate future
direction for their company.
Figure 1GE Nine Cell Matrix
(Source: Das, 2011)
However, there are various problems and limitations as well such as: there is no
research to prove that there is a relationship between market attractiveness as well as business
position. In addition to this, this approach does require extensive data gathering (Kathawala,
2001). The matrix clearly shows that Urban Outfitters remains very strong in each of its units
and is competing in many attractive and fast growing sectors. There are significant barriers to
entry in these fashion industries due to the increasing competition and changing needs and
demands of customers. Within the sector of UAE, there are various annual fashion events
were held. It is the part of Dubai shopping festival. It helps in enhancing the attractiveness of
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company (Bloodgood, 2008). Further, it has been founded that these are some of the most
common factors which shows that UAE and South Africa comes under the category of most
attractive markets for fashion retailers. Urban outfitters can easily expand their market
presence by the way of adopting several strategies.
Global Marketing strategy
It is consider as a most effective way by which companies can easily expand their
market presence globally. By selecting appropriate global marketing strategy Urban
Outfitters are able to develop their presence in the market (Muzellec, 2008). Here, marketing
mix for the company helps in determining its 4Ps such as:
Product: It is the most important tool to attract huge base of customers towards the
company. Urban Outfitters are highly responsible for providing wide verities of products as
well as services. They provide a range of unique style miscellaneous and furnishing products.
Product differentiation is their main retailer strategy. For this, new and classic style clothes
and daily household appliances will sell together at the same time. At the time of business
expansion, Urban Outfitter has selected the clothing category for its each business unit
(Czinkota, 2012). For this, company target young adults aged between 18 to 30. They are
highly fashionable and trendy. The product offering includes women’s and men’s fashion
apparel, footwear and accessories and apartment wares and gifts. For this, they have targeted
the women aged 30 to 45. There are various homes furnishing products as well which helps
in attracting number of women’s. The business unit of urban outfitter, free people is highly
responsible to offer branded merchandising targeted to young contemporary women. Further,
the product category determines that Urban not only sell its own brand products but also
exclusive products from third party brands (Hartline, 2010).
Place: The main aim of this company is to create a fashion store not only a physical
shop. It is the best way to attract more number of customers. Majority of stores of urban
outfitters are within the area of upscale metropolitan. However, they also provide online
services to their customers. While expanding their business, shopping mall is the prominent
place in UAE to open up a fashion store. In addition to this, within the metropolitan area of
South Africa store can be opened as young people are the main target. They are highly
maintaining their consumer base through their online network and helps in defining
appropriate strategy for the same (Muzellec, 2008).
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Price: The product price of Urban is much higher than its competitors such as GAP or
H&M. one of the major reason behind keeping the high prices is its products uniqueness and
quality as well. It supports the overall pricing strategy in compassion to Zara as well as
Topshop.
Promotion: It is considered as a most important marketing mix of company as it helps
in attracting huge base of customers. By the way of selecting best promotional strategy
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companies can easily enhance their brand image. Urban outfitter promotional policy is
mainly based on the social media. It is the most prominent tool through which company can
reach out to their target audience (Liu, 2013). By developing their new market presence also
they can target the customers from age group of 18-30. These people are highly aware with
the social media notifications. URBN’s social media outlets include: Twitter, Facebook,
Instagram, Blogs and Foursquare.
Market entry strategies:
By the way of going through the marketing mix of Urban Outfitters it has been
founded that they are the affordable brand. They do not have stores in UAE, Asia as well as
African Countries which is the emerging new market with tremendous opportunity of growth.
However, there are different market entry strategies such as Licensing, Merger or Takeover,
Joint Venture etc. Urban Outfitters are planning to expand with their existing presence and do
not go through any type of merger with any other organization (Kleiner, 2004). There are
several competitors of urban outfitters such as São Paulo is Topshop, Zara, Mango & H&M
etc. By its existing presence it can be determine that internal expansion is one of the best
market entry strategy adopted by them while expanding their business in South Africa as well
as UAE. However, the pricing strategy may differ according to the class range of country.
This is the most effective method used by the store that would like to start business in the
new developing foreign markets. By using this method, firm utilizes the common methods as
per their home country. The main aim behind selection of this strategy is the growth of the
company financed utilizing internal resources (Kathawala, 2001). It helps them in making
their presence within these countries with minimal threat and also at the same times in a
comparatively low cost.
With the help of above set strategies company can easily enhance their brand image as
well as their customer’s base.
Strategic Marketing Policies
In today’s highly competitive environment most of the firms are developing their e-
commerce presence as it helps them in reaching through the large number of target audience.
By making their e-commerce presence, urban outfitters are able to expand their business.
Strategic marketing policy of company can be easily explained by the BCG growth rate
matrix.
Ansoff Matrix:
It represents the growth rate of company as well as its products and services with the help or
new product development. It portrays alternative corporate growth strategies by going through the
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appropriate study about the existing markets and new markets as well as existing products
and new products.
Market Penetration: It is the most effective strategy which helps the company in
increasing their market share. Under this, with the help of their existing products in their
current market segment company can easily increase their market share. In this, Urban sells
its unique style miscellaneous and furnishing products as well as women’s and men’s fashion
apparel. In this market, they target young adults for latest fashion clothing (Johnson, 2013).
Market development: In this category firm seeks growth by targeting its existing
products to new market segment. For this, Urban has selected South Africa and UAE as their
new market for its existing fashion products. By this, they are able to gain market share and
help the products become successful.
Product development: Except clothing they are now come up with the concept of
footwear and accessories and apartment wares and gifts. For this, they highly target women’s
as they are highly aware with the fashion accessories and gift items.
Figure 2 Ansoff Growth Matrix
(Source: Global marketing. 2014)
Diversification: In this, firm grows by diversifying into new business by developing
new products. Urban has gone through the strategic planning for its brand’s rapid
development within the UAE and South Africa.
Marketing mix policies (7Ps) of Urban Outfitters
Under this marketing mix, various marketing activities are engages by the company so that
they can best meet their consumer’s needs.
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Price: The pricing strategy of Urban is highly related with all of its competitors. Here,
they keep their product prices high (Hoppner, 2013). In this regard, they provide unique and
quality products to their customers. The overall pricing strategy of Urban has been decided as
per their competitor’s strategies so that consumer base can be increased.
Place: They mainly target upscale metropolitan areas for their stores in order to
attract huge base of customers. With the help of this they can make their products available to
all their clienteles.
Product: Urban outfitters are the most famous clothing retailers and they are offering
different products including women’s and men’s fashion apparel, footwear and accessories
and apartment wares and gifts.
Promotion: The major marketing policy of company depends on their promotional
strategy in which Urban Outfitters has selected social media tool such as Twitter, Facebook
etc. With the help of this they are able to attract large number of customers.
Physical evidence: It can be defined as an environment on the basis of which Urban
deliver their services and communicate with their customers as well (Aspara, 2007). They are
having their different stores in different locations from where people can easily go through
the shopping.
Provision of Customer service: Urban Outfitters provide high quality services to their
customers. In this, they handled their consumer’s queries by direct face to face interaction as
well as through their websites. A person with strong knowledge of prestige brands will be
selected for the most effective process of Urban.
Process: There are number of process involves such as handling customer complaints,
processes for identifying customer needs and requirements, processes for handling order etc.
(Global marketing, 2014). With the help of this process, they are able to maintain and
develop appropriate customer relations. Products will be sent from the manufactures to Head
office then distributed to all the physical stores.
CONCLUSION
From the above study it has been founded that Urban Outfitters can easily make their
global presence in South Africa and UAE due to their existing top presence. By having
product uniqueness and high quality services they can easily go through their business
expansion in both of these countries and enhance their market share as well. With the help of
GE matrix it has been identified that Urban Outfitters remains very strong in each of its units
and is competing in many attractive and fast growing sectors.
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<http://education-portal.com/academy/lesson/the-global-marketplace-definition-
lesson-quiz.html#lesson>. [Accessed on 2nd December 2015].
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