Market Analysis of Turkey, UAE and Egypt for Zalando's Expansion

This report analyzes the investment environment, market potential, and government policies of Turkey, UAE, and Egypt for Zalando's expansion. It aims to determine the best country for Zalando to enter and the appropriate market entry strategy. The report includes a Porter's Five Forces analysis for the fashion accessories and apparel industry in Turkey and UAE.

University
Unit Title: Thriving in a Competitive Global Environment
Unit Coordinator: Rukeya Suleman and Colin Knapp
Unit Code: MAR023-6 Assignment Title: Individual Report
Name

Table of Contents
Introduction 3
Background of the study: 3
Objectives of the study: 4
Research Question: 4
Addressing the question 4
Research 4
Analysis 14
Conclusion 18
Conclusion: 18
Recommendations: 18
References 20
2

Introduction
Background of the study:
Zalando is an e-commerce site specializing in branded clothing and footwear for men, women
and children. Established in Germany by Robert Gentz and David Schneider in 2008, the
company is currently headquartered in Berlin. Within a very short time Zalando has been
successful in becoming the largest footwear seller in Europe. Apart from footwear it also sells
clothing and accessories. One of the major reasons for its popularity among customers was
because it housed a large number of international brands. With its aims at expanding, Zalando
included children’s clothing in its inventory in 2010 and subsequently, in 2011 it started selling
exclusive perfumes. Also, in 2010 Zalando acquired the online designer outlet MyBrands. This
significantly increased the target consumer base of Zalando and also the range of premium
products it offers.
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Figure 1: Audit of the company regarding its resources and capabilities (Statement of
financial position)
(Source: Zalando.com, 2018)
After being firmly established in the European market, Zalando aimed at expanding globally.
However, a global expansion always comes along with certain inevitable risks that the
organisation has to handle efficiently. Therefore, in order to face risks in manageable
proportions, the management of Zalando has narrowed down its target markets to three countries
namely, Turkey, Egypt and UAE. The aim of the current research assignment shall be to
determine which market among the three above mentioned countries shall be the most suitable
for Zalando to enter. A number of factors pertaining to the above countries shall be put to
analysis in order to find out which one shall be the most profitable. However, merely
determining the country to expand into shall not be enough. After the selection procedure is over
the next task for the management of Zalando shall be to formulate an effective market entry
strategy that shall not only be able to ward off the imminent risks but also aid in the earning of
profits in the new market. The market strategy shall be one of the most important aspects of the
report as entering a new market shall involve a lot of investments for Zalando and it has to be
ensured that appropriate provisions for the returns on investment are created.
4

Objectives of the study:
The objectives of the study are as follows:
● To determine the investment environment and market potential of the three countries of
Turkey, UAE and Egypt.
● To figure out the best country for Zalando to enter into.
● To devise the most appropriate market entry strategy that can be taken by Zalando in
order to expand into the respective country.
Research Question:
The following research questions shall be the most relevant to the current research project:
● What are the market conditions along with political situations prevailing in Turkey, UAE
and Egypt?
● Based on the above factors, which country is the most appropriate one for Zalando to
enter into?
● What shall be the best market entry strategy for Zalando depending upon its resources
and the nature of its business?
Addressing the question
Research
In case of Turkey: -
Investment environment:
Turkey has highly competitive environment and investment conditions, has strong industrial and
service culture and is highly friendly to all kind of business with an average time of 7.5 days for
setting up a company or new business (Seker et al. 2015). Turkey has strong and skilled labour
force, has sound economic performance, liberal and innovative investment climate, is centrally
located among all the other Middle East nations, has developed infrastructure and facilities for
welcoming new investments and it can be termed as the energy corridor with good connection
with Europe (Çanakçi, 2015). Thus, it can be said that Turkey has a developed market in order to
welcome different kind of investment forms and proposals.
5

Figure 2: Development in Turkey
(Source: Dumludag, 2016)
Effects of government interventionist policies:
The country is the second biggest reformers among the OECD nations on the basis of the various
restrictions on the Foreign Direct Investment since 1997. Turkey has the lowest tax rates among
all the other nations in the Middle East region (Tekin and Tekin, 2015). Turkey has
disinflationary and tight fiscal measures taken up by the Government which is backed up with
couple of structural reforms which have ultimately aided in creating a favourable business
environment in the country (Gürkaynak et al. 2015).
Figure 3: Credit growth rates (borrowing and lending) in Turkey as per the Central Bank
(Source: Kalyoncu et al. 2018)
For providing environment to setting up of new ventures, the Government has kept on decreasing
the interest rates on business loans with the help of Central Bank since the year 2002. However,
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the credit lending facilities has somehow got disrupted in the recent years due to stringent
lending laws and procedures made by the Government. However, the Government as of 2017 has
started meaning the laws and making the lending process more lucid.
The market potential:
Around 46800 companies with international capital and working apparatus perform in the
economy of Turkey, as per the reports of 2015. Turkey has an average of 5.6% growth rate
forecasts till the year 2020 (Aydın et al. 2016). The overall GDP rose to $786 billion in 2002,
however, it fell to $859.8 billion in 2015 from a threshold of $950.58 billion in 2013 (Tansel,
2015).
Figure 4: GDP in Turkey
(Source: Aydın et al. 2016)
It has been the 16th largest economy in the world and is expected to be among the top 10 by the
year 2023. Turkey still has a huge potential in welcoming more business houses as there are least
number of the facts by which business houses have to suffer or fear.
Figure 5: Development of foreign investment in Turkey
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(Source: Aydın et al. 2016)
The impact of regional integration initiatives:
Since the 1980s, the Turkey has tried to better its business relations with the European nations as
well as the American and Asian countries. In the late 1980s, trade volume decreased with Iraq,
the former declaring that it could not meet payments to Turkey amounting to $1.2 billion (Togan,
2015). In order to sustain the economic activities and investments in the economy, Turkey took
major reforms in its policies to grow warm bonding with the European and American nations.
Figure 6: Regional integration initiatives by Turkey
(Source: Country-data.com, 2018)
The economic freedom score found based on the legislative activities can be laid out at 65.4
(Heritage.org, 2018). The main threat entering in this market was stringent business laws and
special privilege given to Arab based nations. However, due to the turning of its economy into a
more global form, Turkey brought reforms, eased relations and made better business policies
with its neighbouring states.
Porter’s Five forces for fashion accessories and apparel industry:
1. Threat of new entry: There is somewhat a high threat of new entry in the apparel and
fashion market in Turkey. Time and cost of entry is low and due to availability of
abundant resources and infrastructure, there remains a cost advantage for the entrant.
Further fashion industry, needs specialized knowledge in order to take entry, which is
available to Zalando unlike many other companies. Thus, there remains barrier to new
entry but it is not an issue for the company.
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2. Supplier power: There are many suppliers for supplying dresses, leather and other
products at cheap prices that are required for selling the goods. Thus, supplier power is
less.
3. Threat of Substitution: There remains a threat of substitution for other companies in the
industry but not for Zalando. With its innovative design styles and higher technology, it
sells unique kind of dresses at cheap prices, which is hard to imitate by others.
4. Buyer power: Different buyer have demand for different kind of good. Mostly buyers are
not united and diverse. Thus, they have no such say over the determination of prices for
the products.
5. Competitive rivalry: In Turkey, mostly small firms operate in this sector. Thus, big firms
like Zalando has a huge option of expansion in this market.
6. Government policies: The Government policies regarding clothing, fashion is sensed to
be a choice of individuals. Further, Government also encourages growing up of new
business in the industry. Thus, it is much advantageous for firms such as Zalando.
In case of UAE: -
Investment environment:
There are huge chances of investment in the UAE. The inward flow of FDI can be seen to be
$10354 million as of 2017 and number of Greenfield investment can also be observed to be lying
at $329 million (Khan and Agha, 2015). The wholesale and retail trade covers almost 25% of the
market investment in which the cloth footwear and apparel industry has a considerable share
(Sbia et al. 2014). There have been ample investment opportunities in this industry.
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Figure 7: FDI in UAE
(Source: Santandertrade.com, 2018)
Effects of government interventionist policies:
The Government of UAE does not take any kind of direct taxes from companies or from
individual people, except the sectors such as oil, banking and insurance. There stands a taxation
advantage for organizations belonging from the apparel, clothing and footwear industry. There is
no such stringent control on foreign exchange and in order to ensure this, the Government has
tried to make UAE one of the biggest trading hubs in the world (Al-Shayeb and Hatemi-J, 2016).
There is an overall political stability prevalent in the country. In case of interest and credit
exchange, the Government has further lowered the credit rates on business loans in order to boost
up the credit growth in the country (Khatat, 2016). This kind of positive initiative can be seen to
be taken into action since 2017. There have been favourable laws in the country which allows
acquisition of real estate by foreigners. As per the new Companies law passed by the Monarch of
UAE, the strategic plan vision by 2021 aims to boost up the Foreign Direct Investment and as per
it, in free zones, investors may keep 100% of the shares of a company (Goby, 2015). However,
as a serious threat, foreign ownership of estate is not so free, non-tariff barriers to investment are
seen to be in operation in the economy as, outside the free zones, a minimum of 51% of the
shares of any business organization has to be possessed by any citizen of the country (Al-Waqfi
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and Forstenlechner, 2014). Lack of transparency in legal proceedings, weakness in the law
governing the intellectual properties, slowing down of credit growth due to hectic procedures for
lending credits, inefficient national statistical data analysing and maintaining and lack of
flexibility in the monetary policies applied by the Government are some of the other threats
slowing down investment activities in the country by foreign concerns (Mason, 2018). A local
service agent also has to be hired for branches and offices run by the Foreign companies as per
the laws of the country. These factors also have thus been responsible for slowing down
investments and ventures in the land.
Figure 8: Credit Growth in UAE
(Source: Abdouli and Hammami, 2018)
The market potential:
UAE has got responsible, hardworking and skilled labour force belonging from the young
generation. In the recent years, couple of developments can be seen to be taken place in the
country. The unemployment rate has fallen to 1.7 in 2017 as compared to 3.8 in 2010 (Alshamsi
et al. 2018). The exports have risen considerable in 2017 as compared to the total imports, the
exports lying at 20.4 and imports at -1.1 in 2017 (Abdouli and Hammami, 2018).
11

Figure 9: Market conditions: Unemployment, exports and imports in UAE
(Source: Hktdc.com, 2018)
The inflation rate was seen to be rising till 2016, however, it had slowed down to 1.8 till 2016,
but has somehow increased to around 3 in 2017. The GDP of the country in 2018 has increased
to be at 3.4 after a rapid fall to 1.3 in 2017 (Alshamsi et al. 2018).
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Figure 10: Market conditions: Inflation and GDP in UAE
(Source: Hktdc.com, 2018)
The impact of regional integration initiatives:
United Arab Emirates has been one of the biggest trading hub in the world. The economic
freedom score of the country stands at 77.6 and can be pointed out to be the 10th freest
economies in the world (Heritage.org, 2018). It is the first among all the 12 Middle nations
(excluding Turkey) having an essence of openness towards foreign business and investments. It
keeps good business relations with the American nations such as U.S and Canada. The country
also shares some of the cultural traits of the Western world, in terms of clothing, apparels, shoes
etc. (Mason, 2018). A huge trade relation is also shared with countries such as England and
France in Europe. It has special trade relations with the middle east nations such as Morocco,
Saudi Arabia, Yemen and Bahrain.
Porter’s Five forces for fashion accessories and apparel industry:
1. Threat of new entry: Taking entry in the fashion industry of the country is pretty easy.
The country has huge resources and developed infrastructure and technology. The
government helps in setting up of business in less time and grants various financial
assistance. There are no such barriers to entry. Thus, Zalando may face both advantage
and disadvantage due to this scenario.
2. Supplier power: There are a large number of suppliers of fashion apparels who make it
available at competitive prices. Further, fashion goods are also delivered using quicker
deliver means which shall help Zalando in setting off the business.
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3. Threat of Substitution: Threat of substitution is not a big issue for Zalando though it may
be for the others. With its innovative design styles and higher technology, it sells unique
kind of dresses at cheap prices, which is hard to imitate by others.
4. Buyer power: The power is huge in this country. Numerous people demand numerous
clothes. However, buyers have different groups and forums where they discuss and keep
track on the pricing of clothes. Thus the power of the buyers seems to be superior
regarding pricing.
5. Competitive rivalry: There are numerous small and big firms in the UAE market. They
supply clothes at competitive prices. Thus, Zalando has to face huge competition from
them in here.
6. Government policies: The Government policies in UAE is pretty much strict and many
fashion are not allowed for women. This hampers the creative innovation of the industry
and put threat to its operations.
In case of Egypt: -
Investment environment:
The government of Egypt understands that attracting foreign investment is the key to achieving
economic development for the nation in the long run. Therefore, the state has introduced various
new legislations that shall not only encourage foreign organisations to invest in the country but
also make the investment process easier and efficient (Kienle, 2015). Sahar Nasr, the minister of
investment and international cooperation declared in 2018 that the government headed by the
Prime Minister, Mostafa Madbouli is paying great attention to international exhibitions that shall
encourage foreign investment and thereby, create more job opportunities for the Egyptian youth
(Daily Egypt, 2018).
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Figure 11: Foreign Direct Investment, trends and growth in Egypt
(Source: Ahmed, 2018)
However, in reality due to many reason such as stringent laws still applicable for foreign
investors, the overall rate of FDI has somehow worsened in the present times. Therefore, it can
be observed that the Egyptian investment environment is being pretty unstable for foreign
investors.
Effects of government interventionist policies:
The government, in order to increase foreign direct investment (FDI), is set to reducing the
interventionist legislations that often curtail the scope of foreign organisations from entering the
Egyptian market (shokr and Al-Gasaymeh, 2018). The business climate is being made more
liberal and the bureaucratic obstacles are being removed. The governmental policies and new
investment laws have opened up the Egyptian market to the world markets and made it
somewhat easier for organisations from America and Europe to enter (Abou-Zaid, 2018).
However, despite the attempts of the government to promote foreign investment there are many
laws that hinder the same. For example, Egypt has stringent labour laws that prevent any
organization operating in the country to hire more than 10 percent non-Egyptian employees (U.S.
Department of State, 2018). Moreover, Egypt experiences an unstable political situation with
15

frequent changes in governments. Therefore, situations might arise when the political climate of
Egypt shall not be encouraging towards foreign companies like Zalando.
The market potential:
Egypt boasts of being a developing economy of the Middle east and has a GDP of $314 billion as
of 2018 (score of 4.5) with per capita GDP at $11,194. The inflation has decreased from 23.5 in
2017 to 21.3 in 2018.
Figure 12: Market conditions: Inflation and GDP in Egypt
(Source: Otchere et al. 2018)
Therefore, it can be inferred that the general population of the country shall have a substantial
buying power and the products offered by Zalando shall be of interest to them. The Egyptian
stock exchange is one of the most lucrative ones in the Middle East region and lists about 600
companies with an annual turnover of $6 billion (lower than Turkey and UAE) (Hashem et al.
2018).
The impact of regional integration initiatives:
Egypt’s close proximity to the major world markets and the rapidly increasing domestic demand
for foreign goods and services have prompted the government to ease up international trade
barriers and increase competitiveness of the market through the entry of foreign companies. The
economic freedom score of the nation lies at 53.4 as of 2018, and it can be seen to be somewhat
improved since 2017 (still seen to be a threat when compared to scores of the other two
countries) (Alnashar, 2018).
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Figure 13: Business freedom score in Egypt
(Source: Heritage.org, 2018)
The government primarily seeks to improve the quality of the domestic organisations and
therefore, competition from the foreign high-performing companies shall force the domestic ones
to better the standards of their services (Cairo.gov.eg, 2018).
Porter’s Five forces for fashion accessories and apparel industry:
1. Threat of new entry: Egypt has high threat of new entry. Due to conservative approach of
society towards the acceptance of new western aligned fashion and lack of adequate
resources, it is a tough task to set up absolutely new business especially in the fashion
and apparel industry. Thus, there remains a barrier for new entrants.
2. Supplier power: Egypt has lesser number of suppliers in the fashion and clothing
industry. Thus the members of the industry like Zalando have no say over the setting of
price of raw materials.
3. Threat of Substitution: There remains threat of substitution for other companies in the
industry unlike Zalando. With its innovative design styles and use of higher technology,
it sells unique kind of dresses at cheap prices, which is hard to imitate by others.
4. Buyer power: Buyers are united and their demands and fashion sense are much similar.
Thus, they have high say and force on the determination of the prices. This seems to be
less profitable for the companies in the industry.
5. Competitive rivalry: There are few apparel and fashion industry and all those are big
firms. Thus, Zalando has somewhat high risk of operating in this country.
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6. Government policies: The government policies regarding choice and applying of fashion
in dresses is strictly monitored by Egypt. The government policies are the harshest among
the three nations. In this case, it would be a huge problem to properly understand the
nuances of the legitimacy of fashion and sell fashion accessories as per that.
Analysis
Turkey:
Turkey appears to have a very lucrative market for foreign investment. It has a sturdy GDP and it
can be inferred that the population of the country shall have a substantial buying power which
shall make the premium range of products in Zalando popular in the market. Turkey has a high
national income and the democratic government shall not interfere into the running of foreign
businesses in the country. Therefore, the organisation shall have a considerable amount of
autonomy in the conducting of its day to day operations. Moreover, the Turkish government has
been steadily incorporating reforms in its legislative structure in order to improve trade bonds
with America and also other European nations. Thus, it can be realised that while expanding into
the country, Zalando shall receive a significant encouragement from the Turkish government as
it shall provide the nation with an opportunity to increase employment and competitiveness of
the market.
UAE:
While on one hand UAE is an affluent country with a hugely consumerist market, there are
certain restriction imposed by the state apparatus that might pose harmful for the conducting of
business by Zalando in the country. For example, the law that foreign estates shall have to have
51% of its shares owned by a national of the country is a serious discouragement to foreign
investment. Moreover, the procedures regarding the entry of foreign organisations in the market
are obscure and consist of various interventionist processes that the government shall engage in.
Even if it has a higher economic freedom score (77.6) as compared to Turkey (65.4), the overall
exercising of rights on real life business practices has a much limited amount of scope.
Besides, there are certain restrictions regarding the choice of garments for women in the country
and therefore, there are certain products that Zalando shall be prohibited from selling in the UAE
market. This shall cut down Zalando’s potential to earn profits to a great extent. Therefore, for
18

the best interests of the organisation, UAE has to be avoided despite the seemingly highly
developed economy of the nation.
Egypt:
Egypt has the lowest economic freedom score, staggering at a low of 53.4, which can be said to
be the lowest among the three nations considered here. Egypt has been listed among one of the
fastest developing nations in the Middle East, however it is less developed and has more
stringent Foreign firm entry laws in comparison to United Arab Emirates and Turkey. Further,
the overall economic and political stability is less as compared to the other two nations. The
overall rate of public spending on infrastructure various and many a time it is seen that
maintenance of necessary infrastructural facilities gets delayed due to crisis of substantial
amount of funds (Helmy and Wagdi, 2016). The sociocultural outlook is also much conservative
as compared to UAE and Turkey, and in most parts of the nation still today, forced hijab for
women is customary (Cagaptay and Sievers, 2015). Thus shall hinder Zalando to sell clothes and
shoes mostly set in a westernized fashion approach. In order to set them perfect for Egyptian
market, they have to develop new set of fashion trends which shall be much costly and hectic for
them.
Hofstede’s Cultural Analysis of Turkey:
● Power Distance Index: The Power distance index of Turkey is pretty low, the people of
nation questions about social norms and religious fundamentals propagated by the Islam
based authority. They attempt to distribute power and exercise freedom for choosing their
own clothes and life.
● Individualism vs. Collectivism: In terms of fashion trends in Turkey, there is a
collectivist approach. Unlike the West, a common fashion trend in clothing and footwear
is prevalent among the people. This shall ease the business operation of Zalando.
● Uncertainty avoidance: Turkey has a lower uncertainty avoidance index, that is people
are more tolerant towards differing thoughts, fashion sensibility and ideas even if
collectivism is applicable in general (Minkov et al. 2017). This is unlike the other such as
Egypt and UAE.
● Masculinity vs. Femininity: People of Turkey have a more feminine approach as
compared to UAE and Egypt, that is they care for quality of life, modesty and
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cooperation. Zalando in this regards shall be able to easily make demand for its high
quality outerwear, underwear, hosiery, clothing accessories, footwear as well as bags.
● Indulgence vs. Restraint: Turkey having a more cosmopolitan approach indulges itself
more in having fun, free gratification of human desires and encourages freedom in every
aspect of choosing one’s own way of leading life (del Mar Miras‐Rodríguez et al. 2015).
● Long term orientation vs. short term orientation: People of turkey have a higher index
(long term orientation) and believe in adaptation and problem solving as essential thing.
They readily accept changes and reforms in the society.
Market Entry Strategy:
● Joint Ventures: It is a kind of business done by two or more parties by collaborating and
sharing all the risks, ownership and governance. Zalando may take up this option and
collaborate with any other local fashion and footwear concern in order to reach out to the
buyers and sell goods as per their requirements. The resources required are least,
managerial responsibilities are divided between the companies. The technology required
is equally supplied and handled by the two members and there remains a unified control
and exercise of resources for marketing and sales. The risks associated is that there may
be disputes related to financial and exercise of power and decisions making between the
two companies.
● Licensing: Licensing includes the authorization to reproduce or copy a patented or
copyrighted product by the authority to a third party. The resources required are least as
main marketing is done by the organization who has taken the license for selling. Only,
costs for managing the activities of the licensee is required. Further, use of technology
and quality of products shall be strictly monitored by Zalando in this case, unlike the
costs that shall be handled by the licensee. The marketing and sales shall be also done by
the licensee. There is limited financial risk for the licenser in this strategy. However,
licensing shall not be much favourable as with it, Zalando cannot take up huge
production of bags, footwear and clothes in the land of Turkey.
● Franchising: It is a kind of entry strategy where a brand (franchise) licenses its business
models, know how, intellectual property and brand image to be able to sell its branded
products with the help of a franchisee (Ayden et al. 2017). It lends all licensed things to
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the franchisee with agreement by which franchisee has to pays fees and comply with
certain obligations. The resources required are less as marketing responsibility is
shouldered by the franchisee. Only, costs for managing the activities of the franchisee is
required. Further, use of technology and quality of products shall be strictly monitored by
Zalando, unlike the costs, marketing and sales activities that shall be shouldered by the
franchisee. There is limited financial risk for the franchiser (Zalando) in here. Thus, this
can be said to be the best market entry strategy as the overall uncertainty of sales in the
new market shall be shouldered by the local franchisee and as a franchisor, Zalando shall
be at profit by getting their due fees.
● Exporting: The company solely has to shoulder all the responsibilities to deliver the
goods at the hands of the exporting agency and finally the market. Use of technology,
marketing, sales and maintenance of quality lies at hands of the company as no such other
agency gets involved in the selling process. Further, the financial as well as political risks
are wholly shouldered by the company. Exporting of clothes, bags and footwear to
Turkey can be considered to be a secondary means combining it with Franchising (Erdil
and Özdemir, 2016). If there is shortage in supply, the needful can be exported to Turkey
to meet customer demands. The resources required for financial, managerial and equity is
huge.
● Outsourcing: The mother company solely has to shoulder all the responsibilities to
understand and make the work done by the outsourcing company. Use of technology,
marketing, sales and maintenance of quality lies at hands of the company and they have
to constantly monitor the work done by the outsourcing company. Further, the financial
as well as political risks are wholly shouldered by the company. The production of
clothes, bags and footwear can be somewhat outsourced by other local companies in
Turkey if the company fails to produce all the products by its own. It shall be cost
effective and the outsourcing agents shall help it to sense market needs and produce the
exact kind of fashion apparels.
The internal factors such as the fashion goods that are being sold over in the site of Zalando,
the degree of differentiation possessed by it and the overall corporate objectives of
expansion, quality maintenance and supply of products at cheap price held onto by the
company can be effectively satisfied by the market entry strategy of Franchising.
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The external factors such as competitive intensity can be said to be not a much of concern as
Zalando is a huge concern and has resources to counter the competitive rivalries. Further,
size of Turkish market is huge and culture, language and tastes of Turkey is very much
related to the West (the home place of Zalando). The Government policies are liberal towards
entry of new firms and selling any kind of fashion products they like without proper
interruption. The people are responsive towards the modern fashioned goods that are sold by
the company. Thus the company should take entry into Turkish market by making use of
franchising method.
Conclusion
Conclusion:
By conducting the study, it has been understood that Turkey is the first nation which Zalando
should choose for entering its market. The various reasons behind the argument of choosing the
most suitable country among the three have been presented here. The study has considered
setting its objectives and basis of research in the first place for the market entry of Zalando. The
overall research has been combined with various graphs indicating the market potential,
Investment opportunities, Government policies and regional integration initiatives taken in the
three of the nations. The opportunities and threats that the company shall face in each of the
markets of the three countries have also be considered in the main research part so that justified
conclusions can be laid upon them. The choice of nations is further justified by conducting the
six dimensional Hofstede’s Cultural analysis framework on Turkey in order to understand about
the social political traits present in the country. The behavioural and choice of people in the
country could be readily understood before deciding about the entry of the company in Turkey.
Further, the study has also considered making the right kind of choice in relation to the market
strategy which the company should choose in order to take entry into the Turkish market. The
whole study has ended on the note of providing proper recommendations in the later part which
has pointed out the perfect market strategy which the company should succumb top in order to be
able to conduct its business in the new market.
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Recommendations:
It has been clearly understood that Turkey shall be the most suitable country where Zalando
should take the entry at first. Turkey has the most liberal economic and social laws, and has the
most freedom in carrying out business activities in terms of fashion and clothing. It is the most
westernized nation as compared to Egypt and UAE. Thus, it shall be hugely profitable and easy
for Zalando to enter the Turkish market and sell westernized fashionable clothes, underwear,
bags and footwear without any interference from the Government or the people of the land.
Further, it can also be recommended that Zalando should choose Franchising as the most suitable
market entry strategy for entering Turkish market. If the demand exceeds their supply, then only,
the company can export the products to Turkey in order to cover up the overall demands. A small
section of the products can also be outsourced to some local cloth manufacturing companies if
the Franchising and exporting cannot suitably meet the overall demands in the country. Zalando,
after taking the entry in Turkey should further try in developing and innovating its products in
order to meet up the changing needs and requirements of the people of the country.
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