This study provides an international market analysis of R.M.Williams, focusing on marketing strategies, competitive analysis, and recommendations for the European and Chinese markets.
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Running head: INTERNATIONAL ANALYSIS OF R.M.WILLIAMS International Market Analysis of R.M.Williams: Name of the Student: Name of the University: Student ID: Author note:
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1INTERNATIONAL ANALYSIS OF R.M.WILLIAMS Executive Summary The study sheds light on the international market analysis fort the RM Williams. The study focuses on marketing strategy adopted by the company into the international stage. The report identifies the R.M Williams’ history of establishment where the company’s core product has been identified. The study has also included a competitive analysis of financial, economic, political, legal and cultural environment in between china and European countries. Identifying different challenges through the analysis of various environment the study provides a recommendation which explains the reason of choosing European market as the preferred market place for the company. While alongside the company identifies strategy to run successfully their business in Chinese market as well. Hence, lastly the study examines a cultural dimension to evaluate the advantage of both the market places and adoption of socio cultural culture by the European market.
2INTERNATIONAL ANALYSIS OF R.M.WILLIAMS Table of Contents Introduction..........................................................................................................................................3 Comparative Analysis of Europe Market and China Market:.............................................................3 Economic and Financial Environment:............................................................................................3 Political and legal environments:.....................................................................................................4 Cultural Environment:.....................................................................................................................6 Recommendations................................................................................................................................8 Conclusion...........................................................................................................................................9 Reference.............................................................................................................................................9
3INTERNATIONAL ANALYSIS OF R.M.WILLIAMS Introduction R.M. Williams Company is named after the name of the Iconic Australian Entrepreneur Reginald Murray Williams, who have started its operation from 1932. The company manufactures boots, and famous for its handcrafted leather boots. R.M. Williams is one of the largest boots manufacturer of Australia, but its products are mostly manufactured in China and South East Asia. In 1988, the ownership of the company is transferred to the Bennett & Fisher Limited, and currently the company and the brand is 100% owned by a private equity affiliate of LVMH. The company is also quite dominant in the International market and after being occupied by the LVMH, the company’s market potential in the Asian market have also increased. In the study below, comparative analysis of the company’s market in Asia and Europe is done through analysing and comparing the economic and financial environment, political and legal environment and also the cultural environ in both the markets. The main objective of the study is to identify international market problems, and also to identify international market opportunity, with accordance to the product diversification and product innovation for different markets. The product portfolio of the company includes various products out of which the key products of the company are their handcrafted leather boots, and the company does not produce other shoes apart from leather boots. The company mainly focuses on the leather products and in its product portfolio they have leather belts, and t-shirts along with leather boots. Comparative Analysis of Europe Market and China Market: In the below the comparative analysis of the company’s international market of China and Europe is done on the basis of some of the major environments and situations, such as economical and financial environment, political and legal environments, cultural environments. Economic and Financial Environment: The international market of R.M Williams in Europe and China is dependent on various factors and the business environment in that particular country. China is the most populated country
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4INTERNATIONAL ANALYSIS OF R.M.WILLIAMS in the world and thus the country is the third largest economy in the world, where the current GDP of the country is US$12.24 lakh crores. Hence, in the market like China, R.M. Williams have identified a huge economical environmental opportunity. The main objective of the company in the market of China is to utilise the benefit of the economic environment of the country and also maintain the financial position of the company to match it. The company therefore could plan its production in huge mass, for the population of the country, and in the market of China, the consumption of expensive and top quality product will be more, compared to other international market. The market in Europe of the company is very huge, as the market consists of many countries, having total population of 74.14 crores, which is very small as compared to the population of China. Comparing the economic environment of China and Europe, the current GDP of Europe is $19.1 trillion. Since, the European Union is the second largest economy in the world, hence it will be bigger economic advantage for the company, as in that economic environment of the market the company could be able to operate its premium operations. R.M. Williams is a premium brand offers premium products in the market, hence such market will be an opportunity for the company to sell its premium and expensive product, as the market will quality and service driven rather than price driven. The financial and economic environment of the company in international markets, China and Europe, will help in providing extra support to the sales of the company. The financial environment of the China is one of the most developed and the most financially growing market in the world. The exchange value of the currency of china (Yuan) to Australian dollar is 0.21 AUD. Political and legal environments: The company’s international market can be also analysed by the political and the legal environment of the company. The company’s operation in the international market is dependent on the political factors and the laws and policies of the local government. The company should
5INTERNATIONAL ANALYSIS OF R.M.WILLIAMS implement the local government’s policies and should follow the local laws to avoid illegal operations and to run authentic business model. The implication of the law is in tax payment, businessproposalandgenerallaws,whichshouldbefollowedduringmanufacturingand operations. If the political environment of the company is supportive in business operations, then the company have advantages in selecting target market and run efficient business, through providing better services in the international market without any major interference and restriction from the local government bodies. The Political and legal environment are very business friendly, because China is the one the largest retailer and exporter in the world, and China’s most of the national income and economy is depended on its global manufacturing and retail businesses, which are exported to various continents and countries in the world, thus it can be said that the government of china, under the governance of the President of China, Xi Jingping, is very supportive for trading industries and the law made is very suitable for the businesses and international trading. R.M. Williams’ most of the product is made of leather and many countries have strict rules and regulations in use of animal skin ad animal products for manufacturing products, but in there is no such law in any parts of the country regarding the use of animal skin and animal products, but China has strict rule for avoiding pollution, because China was the most polluted country in the world, and thus issued strict rules and regulations regarding the air and water pollution. The income of the government of China is mainly from the taxes from the trader, and the taxation law is also supportive, but the taxes charged are high. Thus, manufacturing in China, will be an advantage to the company due to trading friendly government in China. The political and the legal environment in Europe is different in different countries. There are already many businesses and many multinational companies in the Europe market dominating the global market including airline and retail industries. Thus, entry of new companies in the market can reduce the earnings of the current and Europe based market and hence most of the
6INTERNATIONAL ANALYSIS OF R.M.WILLIAMS countries in Europe support existing business, and the other international businesses are allowed with certain special rules and regulation in general to be implement on its business operations. Europe as whole is a very developed continent in the world compile of various developed countries in the world, appreciate new fashion and new businesses in the market with innovative and quality product. The taxation law of Europe is very different than that of in China, because like China, the countries in the Europe don’t have exemptions on taxes on international trading. After some misconduct on company’s financial statement and auditing, by popular companies like Enron, the local authorities, and the Government and the board have issued severe accounting laws and strict auditingguidelinestoavoidmalpracticesincompanies’finalreportpresentation.Europe’s accounting laws and regulation is very strict as compared to that of China, but China have special law and regulation regarded to the maintenance of pollution. Thus, from the above discussions, it can be concluded that the political and legal environment of China as well as Europe, both are very suitable for the Company R.M.Williams, depends on the kind of circumstances. Cultural Environment: Using the Hofstede model of cultural dimension the cultural difference between two countries have been identified. While operating the business in Europe and China the cultural difference has been recognized through the six elements of cultural dimension between both the countries. These are: Power distance, Individualism, Masculinity, Uncertainty avoidance, long term orientation and indulgence (Matzler et al., 2016). Power distance: The power distance score in the chain has been recognized high at 80 which defines that all individuals present in the society are not equal, hence this makes the company to follow a strategy which includes the hierarchy into the work field of the organization and acceptable by the employees. However the European market represents a low power distance score at 35. This represents the company can run their business in European market without being worried about
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7INTERNATIONAL ANALYSIS OF R.M.WILLIAMS distributing proper power to the each of the people. Here the individuals are not influenced by the formal authority. Individualism: With the score of 20 the china represents low at individualism. This means that the country is having a highly collective culture into their society. These means the employees’ commitment to the organization is low. On the other hand the European cultural represents the individualism society scoring at 89. This represents that the employees are high in contribution towards the organization. This reflects that the European people look are supposed to look after each other (Maleki & de Jong, 2014). Masculinity: Both the countries reflect similar score at 66 in the masculinity nature. With the high score in this cultural segment people reflects with the motivational attitude, success oriented and competitive. Here in both the countries R.M Williams can achievement into the work flow through hiring motivated people. Uncertainty Evidence: The degree at which the people accepts the future uncertainty. With the low score at 30, china reflects the low in acceptance of the future uncertainty. The Chinese are comfortable with the ambiguity. As a result of which 70% to 80% of Chinese business tend to be small to medium or facility owned. However the European countries especially in UK reflects the similar cultural attitude. This reflects the attitude to take on uncertain challenges with the positive attitude and goes along with the changing plan. Long term orientation: With the score at 89, china reflects a pragmatic culture. In this country the people are highly adoptable towards the changes. Challenges are accepted broad handed which helps the employees
8INTERNATIONAL ANALYSIS OF R.M.WILLIAMS to survive long term into the organization. However in the European countries specialty in Australia, the score of 51 provides a presence of mixed community. This reflects that compared to the Chinese culture the EU community reflects less long term attitude towards survive and low in making long term survivable strategy (Zhang, De Pablos & Xu, 2014). Indulgence: Compared to china the European people reflects more in indulgent nature. This reflects a score at 69 which is low in controlling the desire and impulses. This is why the society reflects an indulgent culture. This reflects a high positive attitude among the people of Europe with having the desire to enjoy life and having fun. With the combination of cultural factor such as education, learning, politics technology, value, attitude and the social factor such as groups, family, role, status, the European Market represents a high socio cultural environment which helps the company run bring effectiveness into their resource utilization (York & Lenox, 2014). Recommendations Followings are some of the strategic recommendations are stated below, regarding the the market in Europe and China: R.M. Williams should start its manufacturing unit in China, along with in Australia. This will help the company to increase its production and manufacturing in China will reduce the cost of production, because the exchange rate of Yuan with Australian Dollar is very low and the overall circumstances including all environments discussed above, will support the operation. The marketing experts and the management of the company should target the European market for the sale of its premium products, because there is no such competitors in the
9INTERNATIONAL ANALYSIS OF R.M.WILLIAMS Europe market, and the due to all the factors and circumstances, the company will be able to hold the market with loyal customers. The Company should follow the European standards, and should maintain its accounting records in accordance to the standards, and hence the company will be more aware of malpractices. This attitude will be appreciated by the European clients. By considering the cultural environment, the company should prefer the European market, as the above study states the power distance is very low in Europe as compared to the China. Conclusion From the above discussion, it can be concluded that a company like R.M. Williams, should prefer European market over China, because the support of the financial and economic environment of Europe will help the company to grow its market internationally, and expand its revenue. The geographical area and the population of Europe will help the company to expand its market internationally. The cultural analysis of the company also concludes that the European market will more accept the company, because of low power distance. Reference Bevan, S. (2015). Economic impact of musculoskeletal disorders (MSDs) on work in Europe.Best Practice & Research Clinical Rheumatology,29(3), 356-373. Breslin, S. (2016).China and the global political economy. Springer. Fewsmith, J. (2016).Dilemmas of Reform in China: Political Conflict and Economic Debate: Political Conflict and Economic Debate. Routledge. Hamilton, L., & Webster, P. (2018).The international business environment. Oxford University Press.
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10INTERNATIONAL ANALYSIS OF R.M.WILLIAMS Handcrafted Leather Boots, Clothing & Accessories | R.M.Williams®. (2019). Retrieved from https://www.rmwilliams.com.au/on/demandware.store/Sites-rmwAU-Site/en_AU/Home- Show He, Q., Bertness, M. D., Bruno, J. F., Li, B., Chen, G., Coverdale, T. C., ... & Liu, J. (2014). Economic development and coastal ecosystem change in China.Scientific reports,4, 5995. OurHistory.(2019).Retrievedfrom https://www.rmwilliams.com.au/our-history/RMWhistory.html?lang=en_AU Shenkar, O., Luo, Y., & Chi, T. (2014).International business. Routledge. Tang, M., & Huhe, N. (2014). Alternative framing: The effect of the Internet on political support in authoritarian China.International Political Science Review,35(5), 559-576. Valickova, P., Havranek, T., & Horvath, R. (2015). Financial development and economic growth: A meta‐analysis.Journal of Economic Surveys,29(3), 506-526. Wang, Y., Chen, C. R., & Huang, Y. S. (2014). Economic policy uncertainty and corporate investment: Evidence from China.Pacific-Basin Finance Journal,26, 227-243. Wetherly, P., & Otter, D. (Eds.). (2014).The business environment: themes and issues in a globalizing world. Oxford University Press.