Market Expansion Strategies for Chic by Choice: Project Report

This project focuses on developing market expansion strategies for Chic by Choice, a company seeking to transition from an online presence to physical retail stores, specifically targeting the UK market. The research employs methodologies like PESTLE and Porter's Five Forces to analyze the external environment, while the TOWS matrix is used for internal analysis. The project aims to identify appropriate market entry modes, assess risks, and formulate effective marketing strategies for successful expansion. It explores various market entry strategies such as licensing, franchising, strategic alliances, and mergers and acquisitions, analyzing their advantages and disadvantages. The project also includes a time scale for research activities and addresses key research questions related to market entry modes, analytical tools, risk factors, and marketing strategies. The project's ultimate goal is to provide actionable recommendations for Chic by Choice to establish a successful physical presence in the UK market, leveraging its existing online brand recognition and catering to the fashion preferences of UK consumers. The project also includes a detailed literature review and internal analysis using a TOWS matrix to highlight the company's strengths and weaknesses.

Entrepreneurial Project
Research Topic: Market expansion strategies for Chic by Choice

Table of Contents
Research Topic: Market expansion strategies for Chic by Choice..................................................1
Research and planning methodology..........................................................................................3
Research aim and objectives ......................................................................................................4
Research questions......................................................................................................................4
Justification for selection of company........................................................................................4
Time Scale...................................................................................................................................5
Literature Review.............................................................................................................................6
Organisational Background.........................................................................................................6
Business Expansion Strategies ...................................................................................................6
Internal analysis .........................................................................................................................7
External analysis ........................................................................................................................9
Market expansion strategies......................................................................................................11
Risk Analysis.................................................................................................................................13
Recommendation and conclusion..................................................................................................13
Conclusion ................................................................................................................................13
Recommendation ......................................................................................................................13
REFERENCES..............................................................................................................................15
APPENDIX – ................................................................................................................................17
.......................................................................................................................................................17

Research Background
Market expansion refers to be an effective strategy which helps a firm in maximising its
current and future sales (Putzhammer and et. al., 2019). For making such a strategy, it is essential
for a firm to consider which market would be easy in light of experience A property management
is essential for a company especially those who has online presence and seeks to open physical
stores now. For purchasing a run-down store, remodels them and conduct market analysis
carefully, is also considered as main aspects for developing strategy (Koves, A. ed., 2019).
Recognizing that marketing skills could be applied to opening a store, so that factors that may
impact on business operations can be explored and strategies to overcome from same can be
made. The present research is based on this concept of market expansion, where a company i.e.
Chic by Choice, wants to open physical layouts in commercial marketplace. Currently this firm
has online presence in Europe and UK marketplace, where through its websites, people can hire
branded designer and luxury clothes which are curated by department and boutiques stores.
Dealing in the e-commerce fashion industry, this firm is headquartered in European Union, in
2014 by Filipa Neto. In order to develop market expansion strategy for opening retail stores in
UK market, present report is highlighted the political environment and other situation of
marketplace of this nation. Through this process, proper recommendation for growth strategy for
respective company also made.
Research and planning methodology
For gathering information about UK market and its current situation that is essential to be
known by management of Chic by Choice, Pestle and Porter’s Five Forces model is used.
Hereby, Pestle model helps in understanding political and legal environment, social factors and
more, that helps in developing business policies as per rules and regulations of UK, so that
chance of running business long time in this nation can be enhanced (Craypo and Nissen, B. eds.,
2019). While by Porter’s five force model, level of competition, threats of substitutes, new
entrances and more, can be evaluated to develop effective growth strategies for market
expansion. While to identify internal capabilities of Chic by Choice that helps in understanding
how much company is enabled to achieve its objective, TOWS model is used. This would also
help in evaluating weaknesses of respective business that might come as barrier during
expansion (Tashman, Marano and Kostova, 2019). The risk analysis is also going to be
considered for evaluating the opportunities that may enhance future sales of respective firm in
3

UK marketplace, through physical outlets. For this process, proper market analysis is done by
taking a number of secondary resources that will appropriately arrange in literature review part.
While to conduct data analysis, self-questionnaire is prepared which will be further fulfilled by
company’s stakeholders and investors. But before to done all these planned activities, the main
aim and objectives of present research is framed in following way –
Research aim and objectives
Aim:
The main aim of this research is “To develop market strategies for shifting business
from online to offline by utilising market entry mode across the nation.”. A case study on Chic
by Choice.
Objectives
 To identify the different market entry mode for opening physical stores in market era.
 To analyse the internal and external market analysis of new marketplace of UK.
 To conduct risk analysis for determining proper growth and success at new marketplace.
 To develop marketing strategies for opening physical stores in UK marketplace.
Research questions
 What are the different market entre modes for opening a store in new marketplace?
 Which analytical tools are needed to analyse new marketplace of UK?
 What risks factors will be involved in growth and success of business expansion?
 Which marketing strategies need to adopt to Chic by Choice to enter in UK marketplace?
Justification for selection of company
Chic by Choice is operating in e-commerce industry with only one showroom in Portugal.
Through its attractive websites, customers get opportunity to hire designer wears and jewellery
on discounted rates. Therefore, the reason behind chosen of this firm how such a company can
face challenges and benefits if open its physical outlets either in headquartered area or across the
territorial boundaries. Through this report, proper suggestions for respective firm to open
business in UK marketplace is given.
Time Scale
In order to conduct research and market analysis, following activities will be done with
time framework -
4

ACTIVITES W1 W2 W3 W4 W5 W6 W7 W8 W9 Wk10
5

Research topic
Research and
planning
methodology
Collect secondary
sources of
information for
research project
Complete
collecting data for
study and present
the result
Discussion
Risk analysis
Recommendation
and conclusion
Prepare final draft
Feedback updated
Complete the
report and submit
the final report
Literature Review
Organisational Background
When a firm achieve a certain level of success and has marked its presence as a company
leader, then to gain higher benefits, they think about further expansion of business into new
markets (Putzhammer and et. al., 2019). It aspires good entrepreneurs that early success in
6

business may often fuels their dreams of higher growth. But such expansion of business requires
a firm to conduct proper market analysis and take careful steps to market its position, because
without proper understanding of business environment, the pitfalls of their business will grow
too fast (Koves, A. ed., 2019). However, along with drawbacks, there are number of factors also,
that provides advantages of growth and success, that may help in making the right decision for
business expansion. In context with present firm i.e. Chic by Choice, this firm has made its
effective presence in online market, that creates viability of its business in targeted customers.
So, it shows that opening physical stores may provide higher benefits to this firm and retain
existing as well as attract new customers more easily (Craypo and Nissen, B. eds., 2019). Market
trends tend considers as to be heavily influenced by habits of consumer and their preferences. In
this regard, it is identified that opening business in UK market would prove beneficial for Chic
by Choice, because people of here prefer to buy trendy and fashionable clothes that are available
on cheap rates. As respective firm offers its designer clothes and jewellery on rents therefore, it
will be easy to increase footprints of customers in its new outlets more easily.
Business Expansion Strategies
To operate business in international market, there are number of market extension
strategies that can be used using market entry modes like merger and acquisition, strategic
alliance and partnership etc. as explained below –
 Licensing and franchising – Licensing refers to a business arrangement in which a
firm allows another company for manufacturing its products at specified modes of
payment . While franchising defines a process where a company use the trademark or
brand logo of another firm for marketing own products. These are the two specialised
modes for international expansion which would help Chic by Choice in easily entry into
another market, with low cost and less risk in business expansion (Ren, Hu and Cui,
2019). But having a less control considers as most disadvantage factor licensing and
franchising modes for Chic by Choice in UK marketplace.
 Partnering and strategic alliance – Forming global strategic alliance provides the
incredible new opportunities to business like sharing of resources to launch a firm in
new marketplace. This would allow the partners to reach their goals more easily by
establishing their business in rapid manner. By strategic alliance with local partners,
through contractual agreement, Chic by Choice can easily open its layout in UK
7

marketplace. This would help in understanding culture, taste of customers and way of
operating business competitively than others (Breinbauer and et. al., 2019). But it will
take higher cost than other market entry modes as well.
 Merger and acquisition – M&S opens up a new market for both firms that merge their
businesses for selling the products in overseas (Putzhammer and et. al., 2019). It
upgrades the internal capabilities of organisation by creating a massive charge on
numerous budget line. By purchasing or exchanging stock of other firms, Chic by
Choice can establish its business more easily.
Advantages and Disadvantages of each market entry strategy -
Strategies of business
expansion
Advantages Disadvantages
Licensing Licensing the business will
reduce the requirement of
sourcing money for
commercialising the
business.
Loss of control over
business operations, poor
quality management and
more, are some of the
potential risk of licensing.
Franchising This would provide more
secure investment with
benefits to find loyal
customer base and brand
recognition.
Using this strategy will
arise restrictions for a firm
in terms of business
operations, where it sell the
products and more.
Partnering and strategic
alliance
Strategic partnership will
help a firm in enhancing the
productive capacity of
business in terms of
distribution system, creation
of synergy and more, with
reduction in costs and risks.
However, alliance can add
value to business at new
marketplace, but it may
create conflicts in claims of
ownership between partners
and lead to arise further
discrepancies also.
Merger & Acquisition When two firms come This may create differences
8

together via M&A then it
adds more value by
enhancing the level of
overall revenue.
within organisational
culture when employees of
two different firms works at
same place.
Therefore, it has been analysed from all over the discussion that global strategic alliance
will help Chic by Choice to get incredible new opportunities, for opening its business over
market area of UK (Breinbauer and et. al., 2019). By forming alliance with local or branded
companies of UK, it can maximise its resources, through which global presence can easily
establish. As this firm has already earn the trust of its loyal customers of UK marketplace, by
offering products through online, therefore, formation of strategic partnership to enhance the
more value of business in new retail stores. Along with this, it also provide new insights as well
as ideas to respective firm in improving its existing product line, which will create an edge over
competitors. This would increase chance of generating more revenues and success from moving
the business from online to offline mode (Koves, A. ed., 2019).
Internal analysis
Online retail business has become extremely more competitive, where presence of a
number of substitutes creates threats for a firm to enhance its sales (Hair Jr, Page and Brunsveld,
2019). Here, niches are plugged with alternatives and a compelling brand is catering for each and
every market segment. Therefore, under such condition, to enhance more sales, move business
from online to physical stores will prove beneficial for Chic by Choice. As due to presence in e-
platform, its business is already famous in Europe and UK marketplace, therefore, if open-up
physical stores will provide opportunity to customers to hire designer wears directly as per
choice (Ulin, 2019). But before shifting business to new marketplace, it is essential for this firm
to examine its capabilities and how much it is able to grab market opportunities. For this
purpose, TOWS matrix is considered as perfect tool to analyse and select the perfect business
strategies for attainment of business goals and objectives. Instead of identifying business
opportunities or threats of marketplace, this tool focuses on main aspects of opportunities and
risks that creates threats (Kremez and et. al., 2019). Henceforth, taking TOSW matrix as a tool to
generate strategy for market expansion in UK, internal analysis of Chic by Choice is done in
following way –
9

Chic by Choice has various strengths, weakneses, opportunities and threats as under:
Strengths:
 Strong portfolio and brand image in retail sector
 Strong supply chain
 Having support of investors for capital requirement
 Successful entrepreneurs in e-commerce and fashion industry
Satisfied large base of customers of both Europe and UK marketplace
Weaknesses:
 Shortage of human resource with less experience staff
 Lack of specific knowledge and skills that are essential for running a store in competitive
marketplace.
 Having high inventories that requires more place to manage the quality of products
Imitator, not creator where not having strong presence in physical stores may create barriers in
attracting customers
Opportunities:
Accessing to both European Union and UK marketplace
Global expansion in both e-commerce and physical market
Availability of technology for enhancing shopping experience
Improvement in workplace by hiring more workers who have knowledge to deal with customers
in retail section
Threats:
 Lack of collaboration with local suppliers and dealers
 Changes in customer preferences and trend
 Instability of politic and economic factors
 Fierce competition
Using all above SWOT factors, TOWS strategy is developed which shows how Chic by
Choice can establish their potential of growth in the UK market.
Strengths Weaknesses
Strengths/ Opportunities (SO) –
 Utilising the existing strong brand
image in retail section and multichannel
Weaknesses / Opportunities (WO)
 Increase workplace by hiring talented
workers for different-different positions
10

Opportunitie
s
strategy to flourish the marketplace of
UK
 High demand of customers to hire
designer clothes and jewelleries on
rent, help in enhancing sales at
stores, by providing them range of
items on attractive discounts
(Craypo and Nissen, 2019).
 Increase market share in UK area by
offering trendy and fashionable clothes
as per demand of customers on
reasonable rent price.
at stores and provide adequate training for
human resource development.
 Develop a new management system and
introduce new technologies at stores for
creating innovations in business.
 Logistic department and proper inventory
management at store layouts.
Threats
Strengths / Threats (ST):
 Make investment in research and
development for proper market
analysis.
 Increasing market share by developing
relationship with local suppliers and
distributors to understand demand of
new market and offer designer wears as
per customer preferences
 To overcome from fierce competition,
Chic by Choice needs to utilise all its
core strengths which provide a
sustainable advantage, with more focus
on branding strategies.
Weaknesses / Threats (WT)
 Offer products on competitive rates by
focusing on multichannel strategy.
 As shopping behaviour changes the
customer preference therefore, more
innovation is necessary to increase
footprint of targeted audience of UK.
 Promotional activities based strategies
will ensure proper growth and success of
business.
External analysis
Before launching a business at new place, it is essential for every company to determine the
business environment of that place (Ma and Yang, 2018). This would help in determining the
risk factor as well as in developing strategies to deal with same. In context with Chic by Choice,
11

in order to increase chance of future growth and success, by opening its physical stores in UK
market, it is essential to conduct how external factors impact on it operations. For this purpose,
PESTLE analysis has been done in following way –
Political factors – UK is considered as a part of EU market, which reflects that it can
trade in other markets of fourteen countries easily, without facing any barrier (Putzhammer and
et. al., 2019). Therefore, launching business in both EU and UK market, will prove beneficial for
Chic by Choice in terms of – greater competition, no cost for changing the currencies, greater
access for cheap factors like labour, raw materials and other, etc. Along with this, in context with
stock market, UK also gives advantages for a cheaper marketing environment with a lower
regulatory burden (Koves, A. ed., 2019). But to reduce the impact of Brexit, respective firm has
to develop effective policies to stay in this market long.
Economic factors – Economic volatility of UK market can affect both sales and
profitability of Chic by Choice. But demand of customers for trendy and fashionable clothes,
with high level of competition among fashion retailers, help in stimulating the recession period
of economic (Craypo and Nissen, B. eds., 2019). People having low income level due to high
unemployment, mostly seeks to purchase apparels and attires on rent. So, expansion of rental
clothing in such area in terms of both casual and formal, with cost-effective service, give
advantage to Chic by Choice to easily enhance its sales and generate high profitability as well.
Social factors – Due to social media, today, customer taste for fashion and trendy clothes
has continuously changed. Therefore, most of the domestic and international countries concerns
more on offering fashionable attires on cheap rates in UK market, to retain customers for long
time (Liuhto, 2019). So, social factors play a major role in enhancement of growth and success
of fashion industry. High class fashion now no more privilege for any class of people due to
availability of range of products on affordable rates. This would reflect the chance of high sales
for Chic by Choice as it offers designer branded wears on rents.
Technological factors – The technological infrastructure in UK market is more
sophisticated, where to gain high competitive advantages, each firm concerns on introducing best
technological at stores that enhance shopping experience of customers (Sharma, 2018). Along
with this, technology also plays a stronger role in influencing the taste and preference of
consumers for increasing their feet in retail stores. The fast and rapid developed fashion segment
of this industry has also reflected that presence of affordable luxury brands attracts and retain
12