Prada's International Marketing Strategy

This assignment tasks students with analyzing Prada's international marketing strategy using several key frameworks. It requires an application of PESTLE analysis to understand the macro-environment, Porter's Five Forces model to assess industry competition, and an exploration of Prada's R&D partnerships and their impact on intrafirm integration. The assignment also draws upon relevant academic literature and case studies to provide a comprehensive understanding of Prada's global marketing approach.

INTERNATIONAL MARKETING
MANAGEMENT

Table of Contents
INTRODUCTION................................................................................................................................4
Q.1 Advantages and disadvantages of globalisation........................................................................4
Q. 2 Environment analysis...............................................................................................................5
Q. 3 Competitive Advantage............................................................................................................8
Conclusion............................................................................................................................................9
References..........................................................................................................................................10

Illustration Index
Illustration 1: PESTLE analysis...........................................................................................................6
Illustration 2: Porter five forces model.................................................................................................7
Illustration 3: Ladies bages of prada....................................................................................................9
Illustration 4: Perfumes of prada........................................................................................................10

INTRODUCTION
International marketing can be defined as a process of buying and selling of product and
services among various countries. It is an opportunity in which organization increases its business
activities in the global market (Papadopoulos and Heslop, 2014). Prada is an Italian fashion brand
which provides fashionable products like stylish clothes, ladies bags and perfumes to its consumers
in the world. The present report describes the advantages and disadvantages of globalisation for
corporations. Further, it explains the environmental factors which create impact on the firm
regarding its further expansion. In addition to this, it defines competitive strategies of Prada to take
rival advantages in the global fashion industry.
Q.1 Advantages and disadvantages of globalisation
As per case study, Globalisation is a process in which organization expands its business
operations to earn more profit in other countries of the world. It has some advantages as-well-as
disadvantages. According to Terpstra, Foley and Sarathy (2012), globalisation contributes effective
role in assisting business entities to expand their business in many new areas. Further, it helps the
enterprises to enhance profit and revenues in the global market (Terpstra, Foley and Sarathy, 2012).
For example, Prada is increasing its business operations in many countries like USA, UK, France as
well as India which contribute effectively to enhance its market share internationally. As per
Czinkota and Ronkainen (2012), it also generates many complexities for the managers and
employees regarding management of work of their retail operations at cross border levels (Czinkota
and Ronkainen, 2012). For example; global trades and tariffs enhances the expenses of Prada which
creates problem to manage monetary funds for further expansion in new areas.
In addition to this, According to Paliwoda and Thomas (2013), globalisation plays effective
role for organization to increase the quality product and services in the global market. For example;
Prada improves quality of leather products and bags by analysing the product quality of its
competitors like Gucci and Louis Vuitton. This process helps to create effective impact on the
international and national consumers (Paliwoda and Thomas, 2013). As per Turnbull and Paliwoda
(2013), many local competitors copy designs and specifications of reputed organizations which
creates issue for them. For example, many local rivals copy design of Prada products like leather
bags and other products which reduces its sales in the global and national market (Turnbull and
Paliwoda, 2013).
According to Johanson and Mattsson (2015), globalisation helps the corporation to make
new designs for products as per the customised requirement of domestic and international
consumers of the world. This process provides effective opportunities to earn profit in the global
market. For example, management of Prada conducts market research in many countries to finds out

needs, requirements as-well-as lifestyles of elite and premium class people which help to make
appropriate products as their preference. This process demonstrate appropriate role of firm to
achieve effective revenues from international markets (Johanson and Mattsson, 2015). However,
culture and religion of every country creates problems to design different types of products on
customise basis. For example, Prada designs various kinds of products as per specific market
requirement which increases its expenses on market research as well. In addition, this thing creates
complexities for management of organization to manage its money for further investments in the
global market (Akaka, Vargo and Lusch, 2013). As per Majaro (2013), globalisation also provide
better opportunities to increase brand image and revenues of organization. For example, Prada
organization expands its business operations in developing and developed countries which
contribute effectively to increase its brand image (Majaro, 2013). On the basis of above statement, it
can be said that this process enhances very high competition between local and global companies
which reduces profit margin of Prada (Advantages and Disadvantages of Globalization, 2016).
Q. 2 Environment analysis
According to case, management of Prada can use PESTLE analysis and Porter five forces
model for analysing its international environment. It is represented below in the paragraph:
PESTLE analysis

(Source:Berthon and et.al., 2012) Political and legal factors: Management of Prada must ensure proper knowledge regarding
tariff, taxes, rules and regulations of the concerned government of nation. It helps the cited
firm to take effective decisions for its expansion in the global market (Berthon and et.al.,
2012). For example; political aspects of the USA are supportive in favour of organization to
establish its business. Generally, income and VAT are not very high in comparison to the
same in other developing countries like China. These factors help Prada to increase its
business operations in the USA. On the other side, legal factors are also strict for both local
and global companies. So, management of Prada have to follow employment, health and
safety polices of the US government. These factors create complexities to manage its retail
operations in the market. Economic factors: As per case, economical factors like inflation rate, GDP (Growth
Domestic Product) rate, GNP (Growth National Product) as well as fluctuation of currency
affects the expansion operations of multi-national companies like Prada (Johanson, 2013).
For example, they support the organization to its retail operations because; current economic
conditions of the USA are appropriate to expand its business. Social factors: Social factors like education, lifestyles, trends and income help Prada to
Illustration 1: PESTLE analysis

make better expansion strategies. They help the firm to gain effective profit from consumers
in the market. For example, social factors are supportive for organization because income
and lifestyle of people are favourable which help to spread its business activities in fashion
market of the USA. Technological factors: According to case scenario, communication facilities, internet,
production efficiency, government activities and legislation contribute effective role for
Prada to enter in new markets (Eng and Ozdemir, 2014). For example, these factors help the
organization to enter in market of the USA. They support the firm to manage its business
operations in an appropriate manner.
 Environment factors: Rules and regulation of climate safety affect Prada to initiate its
business activities in the new global areas. For example, environment policies of the USA
are very strict regarding climate safety. So, organization has to emphasize on green activities
and Corporate Social Responsibilities (CSR) activities to keep safe the environment of the
country (Gnizy and Shoham, 2014).
Porter five forces model
(Source: Hair. and et.al, 2012) Threat of new entry: Threat of new entry is a medium for organization because local
companies which are entering into international market create several complexities to
develop effective expansion strategies of Prada. In addition to this, organization needs lot of
monetary fund to expand its operations in global markets (Hair. and et.al., 2012).
Illustration 2: Porter five forces model

 Level of competition: As per the given case study, competition level of Prada is high in the
international fashion industry because; there are many fashion organizations like Gucci and
Louis Vuitton which oblige the firm to maintain its price as per market status. This aspect
aids the Prada to make effective expansion plans to manage its operations in the global
market. Threat of substitute: It is medium for organization because corporation design better quality
of products and services for consumers which contribute appropriately to reduce the threat
of substitution in the global market (Okazak and Taylor, 2013). In addition, this factor also
helps Prada to enter in various countries of the world. Bargaining power of suppliers: It is low for Prada in the global market because
organization has many suppliers who can provide effective quality of raw materials at an
affordable price. This aspect contribute effective role for firm to make better decisions on its
further expansion internationally.
 Bargaining power of consumers: Bargaining power of customers is high for corporation
because there are many domestic companies which provide same products at low price in
the global market (Lindgreen and et.al.,2012). It creates complexities for organization to
increase its sales of leather products. Due to this reason, Prada firm only covers elite and
premium class segments in the international market.
Q. 3 Competitive Advantage
As per case study, organization has many rivals like Louis Vuitton and Gucci in the global
fashion industry. In addition to this, competitive advantages is a concept which help the
organization to provide better value to consumers in affordable price.
According to Papadopoulos and Heslop, (2014), management of Prada spread its business
operations internationally but organization does not more emphasize on advertisement and
promotion strategies as comparison of its rivals like Gucci and Louis Vuitton. This process creates
issues for corporation to take competitive advantages from its competitors in the global market
(Papadopoulos and Heslop, 2014). As per Terpstra, Foley and Sarathy (2012), management of
Gucci use popular celebrities to promote leather products like bags, shoes and clothes in the
national and international market. These practices contribute effective role for organisation to
increase its market share and profit as compare to Prada firm (Terpstra, Foley and Sarathy, 2012).
As per above statements, Prada can face many issues due to usages of inappropriate promotion and
advertisement techniques.
Czinkota and Ronkainen (2012), Gucci expand its business in domestic as well as
international markets by giving equal priority. As a result, market share and revenues of

organisation are increased as comparison of previous years in many countries (Czinkota and
Ronkainen, 2012). As per Paliwoda and Thomas (2013), Prada organisation more focus about the
domestic expansion of its products and services. Due to this reason, corporation does not get more
popularity as comparison of Gucci. In addition to this, enterprise covers only limited area to sell its
various type of commodities in the national as well as international market. These practices create
issues for Prada to achieve effective competitive advantages as comparison of its rivals (Paliwoda
and Thomas, 2013).
According to Turnbull and Paliwoda (2013), Gucci uses effective market expansion
strategies like merger, joint venture as well as acquisition to increase its business activities in new
areas which provide effective profits from elite and premium class consumers (Turnbull and
Paliwoda, 2013). As per Johanson and Mattsson (2015), management of Prada focus on varied
licensing agreement which create many complexities to manage its sales operations in international
market. In addition to this, it reduce the brand image of corporation in mind of consumer due to its
inappropriate services (Johanson and Mattsson, 2015). As per above comments, management of
Prada can reduce its sales due to usage of ineffective expansion strategies to enter into new
markets.
Illustration 3: Ladies bages of prada

According to (Akaka, Vargo, and Lusch (2013), Gucci does not highly dependent on the
imported goods which helps to increase its efficiency and performance in the domestic and
international market. Further, these practices aid the firm to increase the ranges of its product for
consumers. It contributes effective role for organisation to increase its sales of products as
comparison of Prada (Akaka, Vargo, and Lusch, 2013). In addition to this, As per Johanson (2013),
management of Prada is highly dependent on imported goods which generate issues for corporation
to manage its business activities globally. This process creates complexities for organisation to
enhance the ranges of various types of products for consumers as compare to Gucci (Johanson,
2013). As per above comment, corporation can face many complexities due to lack of domestic
suppliers in the market which reduces its performance in the national as well as international
markets.
CONCLUSION
From the report it is found that management of Prada can use effective advertised strategies
like social media, television as well as celebrities to promote its various types of products. This
strategy can help the organisation to increase its sales of its commodities in the domestic and global
Illustration 4: Perfumes of prada

market. In addition to this, it can also help the Prada to increase its brand value front of consumers.
Further, organisation can adopt effective market entry strategies like acquisition, mergers and joint
venture as per conditions to enter into new global market. These practices can help the corporation
to reduce complexities like legal and other obligations. Further, they can aid the Prada to increase
its market share in the international market. They can contribute effective role for organization to
increase brand values in new and exiting areas. Management of organisation can also reduce the
dependency on imported goods by searching appropriate suppliers in the domestic areas. This
process can help the firm to enhance its efficiency and performance in the market. In addition to
this, it can help the Prada to increase its profit as well as revenues as comparison of previous years.
Organisation can more emphasize to increase its business activities for increasing its sales.
From the report, it is found that advantages and disadvantages of globalisation contribute
effective role for firm to develop effective strategies to achieve effective market share and profit in
new global areas. Further PESTLE analysis and Porter five forces model help the Prada to make
appropriate expansion strategies which help to reduce issues in international and domestic markets.
In addition to this, they also help the organisation to analyse environment global markets.
Competitive advantages of rivals aids the Prada to develop new strategies to manage its sales
operations in a appropriate manner. It can be concluded that insights of organisation contribute
effectively to reduce its various issues in domestic and global market.

REFERENCES
Books and Journals
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OnlineAdvantages and Disadvantages of Globalization, 2016. [Online]. Available through:
<http://www.buzzle.com/articles/advantages-and-disadvantages-of-globalization.html>. [Accessed
on 9th March 2016].