Hawthorn Company: Expanding to India - A Strategic Marketing Report

This report provides a comprehensive strategic marketing analysis for Hawthorn, a UK-based clothing manufacturer, aiming to expand into the Indian market. The report begins with an executive summary, followed by an introduction outlining the company's goals. It then delves into a detailed PESTLE analysis of the Indian market, examining political, economic, socio-cultural, technological, legal, and environmental factors. The report explores various market entry modes, recommending direct exporting as the most suitable approach for Hawthorn. Furthermore, it covers market segmentation and targeting strategies, emphasizing psychographic and geographic segmentation. The report also applies Porter's generic strategic model to assess competitive behavior. The conclusion summarizes key findings and recommendations, supporting Hawthorn's successful market entry into India.

Strategic Marketing

EXECUTIVE SUMMARY
Marketing is the heart of businesses as without company it is not possible to make the customers
aware of the products. Marketing is the action of promotion and selling of the products or
services including market research and advertising. Hawthorn company is been chosen for
assessment. Hawthorn is one of the leading clothing manufacturers of United Kingdom.
The aim of this project is to expand the company in India by introducing designer
clothing for all genders. Pestle analysis is a tool or a basic framework that is used for scanning as
well as analysing an organisation's external macro environment by considering factors that
include political, economic, socio-cultural, technological, legal and environmental. Hawthorn
company is going to expand its company in India, so in order to track the macro environmental
factors, company will use Pestle analysis tool. Mode of entry means when company wants to
enter in the international market.
There are various channels to get entry in the market such as exporting, licensing,
franchising, turnkey projects, strategic alliance, joint venture and wholly owned subsidiary. All
the modes of entry which are discussed above all are effective for Hawthorn company to expand
its business in India. But exporting is the best method for Hawthorn to enter in the market of
India. Company should select Direct Exporting method for expanding its products and services
in India. Market segmenting is the systematic process of dividing the customers into different
categories based on different features.
The reason behind the segmenting the market is that it help company to identify its
customers who are most likely to purchase the product of organisation. Hawthorn is dealing in
clothes so company will majorly target there customer of psycho graphic and geographic
segments because this is the simplest method when company enter in new market. Porter's
generic strategic model is used by company in order to examine the competitive behaviour that
make the business successful. Hawthorn will use this model so that it can achieve success in the
international market.

Table of Contents
EXECUTIVE SUMMARY ............................................................................................................2
INTRODUCTION...........................................................................................................................1
PESTLE ANALYSIS......................................................................................................................1
MARKET MODES OF ENTRY ....................................................................................................5
MARKET SEGMENTATION AND TARGETING ......................................................................8
PORTER's GENERIC STRATEGIC MODEL ..............................................................................9
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Marketing is the heart of businesses as without company it is not possible to make the
customers aware of the products. Marketing is the action of promotion and selling of the
products or services including market research and advertising (West, Ford and Ibrahim, 2015).
In this project, Hawthorn company is been chosen for assessment. Hawthorn is one of the
leading clothing manufacturers of United Kingdom. The aim of this project is to expand the
company in India by introducing designer clothing products for all genders and India is chosen
because it is developing and seventh largest country in terms of GDP. India will be chosen for
assessment because there are Endless options for shopping. India has very good local markets,
where company can get all that they need in much cheaper price. Company will use various tools
and techniques in order to track the environment and make the product successful in the market
place.
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Illustration 1: World Map

PESTLE ANALYSIS
Pestle analysis is a tool or a basic framework that is used for scanning as well as
analysing an organisation's external macro environment by considering factors that include
political, economic, socio-cultural, technological, legal and environmental (Gheibi and et.al.,
2018). Hawthorn company is going to expand its company in India, so in order to track the
macro environmental factors, company will use Pestle analysis tool. India, officially known as
the republic of India is the second largest country by population more than 1.2 billion people and
seventh largest country by area in the world. Here is the detailed Pestle analysis of India which is
as follows-
Political Factor- This factor determine the extent to which government as well as
policies of government might be impact on the company or industry. Political policy and stability
as well as fiscal, taxation and trade policies are included in political factor. All over the world,
India is the most strong country as it enjoys environment of political stability (Proctor, 2014).
India is a democratic country and it runs on a federal form of government. But the political
environment is greatly affected by the policies, interest of policies that has great impact on the
functions and operation of all the companies as well as on Hawthorn as company have to change
there organisations system, structure, policies which takes too much time and resources (Bush,
2017) Government of India has also adopted policy of privatisation in order to improve the
productivity as well as efficiency that is the great opportunity for Hawthorn (Pestle Analysis,
2017). The system of taxation in India is well developed which positively affect the business of
Hawthorn. The stability of political environment of India also attract Foreign Direct Investment
(FDI) which will be a great opportunity for Hawthorn to expand its business of clothes. But
India's major area of concern is corruption which badly affect the businesses of country as well
as political environment and it is the major threat for the company. It increases the cost of
business operation and also affect the foreign direct investment (Zoo, Lee and Yoon, 2017).
Even so, increasing awareness among people as well as government bodies are combating the
challenges of corruption. The best solution of overcoming the corruption is to monitor all the
activities of employees who have power on continuous basis.
Economic Factor- This factor determine the impact on economy as well as performance
which has direct impact on company's probability and functioning. Rate of interest,
unemployment or employment, foreign exchange rate and cost of raw materials are included in
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this factor (Banerjee, 2017). The economic condition of India is stable since introduction of
industrial policy 1991. For introducing clothing of Hawthorn India is the best country as India is
constantly developing with the reduction in licensing, liberalization of foreign capital and FIBP
(Foreign Investment Promotion Board) formation (SHTAL and et.al., 2018). The GDP (Gross
Domestic Product) of India is $2.848 trillion in 2017 by having seventh largest economy all over
the world. The GDP will be expected to raise by 7% in 2020, this is the biggest opportunity for
Hawthorn company to expand there business in India without any fear.
Social Factor- This factor determine the social environment as well as identify emerging
trends. By analysing this factor, Hawthorn can identify or understand the requirements and wants
of people loving in the country. Changes in family demographics, level of education, change in
attitude, cultural trends and lifestyle changes are included in this factor. This factor also gas a
great impact on Hawthorn and other businesses. The consumer market in India is gigantic with
total population more than 1.2 billion. The age distribution is 15-65 people which is 70%. India
has flexibility in attitude of work, eduction, distribution of income and so on. Addition to this,
the great opportunity for Hawthorn is that India offers cheap labour. Reasonable and affordable
labour force boost many big companies to outsource there operations in India. Hawthorn can
offer various stylist and fashionable patterns of clothes to people living in India as living
standard of people in raising day by day (Chernev, 2018). It also seems that disposable income of
middle class people is growing which is also a good opportunity for Hawthorn to expand its
business. On the other hand, India is facing the problem of high poverty which is the biggest
threat of Hawthorn company in there expansion. In order to overcome this threat, Hawthorn
company will raise provide product of all rates and prices so that it is suitable for all class of
people.
Technological Factor- This factor determine the technological rate of innovation as well
as development that has great impact on the market place or industry. Rapid changes in
technology, automation, R&D are all the factors included in the technological factors. It also
affects the development of product as well also introduce processes of fresh cost cutting. It is
reported that India is one the most technologically advance county as well as third biggest
technically advance country across the world which will be a great opportunity for Hawthorn to
grow and develop there business in India. There is great opportunities rising in India for
Hawthorn to offer new style of clothing by using advance technologies. India also provides
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technology of 3G as well as 4G to its users and also facilitates them. Company can also promote
its products by television, radio and present a website and do online selling. The development of
technologies in India is at constant rate which also increases the opportunity to grow and
develop. India is slow in adopting advance technology as compare to other countries like UK and
US. This is the threat for Hawthorn in there expansion but it can be overcome by company by
introduce interesting and amazing technologies which attract customers towards them.
Environmental Factor- This factor determine those elements that influence the
environmental surroundings and the impact of ecological aspects. This factor become more
significant with the rise of Corporate Sustainability Responsibility (CSR). This factors include
recycling process, climate, carbon footprint, sustainability and disposable waste. In India there is
variety of changes in climate and weather that affects companies operation, functions as well as
profitability. Global warming is also increasing day by day which is also becoming the major
concern for many companies or industries (Bush, 2017). But India still India is facing the
challenges of water, aim pollution, depletion of resource, loss of biodiversity and disposal of
waste into water. It is very important for all companies and even for Hawthorn that they need the
environment for working which is pollution free. But Government has taken serious actions in
order to stop all these activities that are polluting the environment as they are charging penalties
and charges to the companies who are despoiling the environment of country (David, David and
David, 2017). Thus, Hawthorn management will always be aware and never dispose there waste
into water. On the other hand, India is facing the biggest challenges which are air pollution,
water pollution, floods, resource depletion such as water and forest, loss of biodiversity, and
diversion of consumer waste into rivers. Expatriates may sometimes find it difficult to live under
some of these environmental challenges and it is also a threat for Hawthorn expansion. The best
solution is that Hawthorn management will always be aware and never dispose there waste into
water.
Legal Factor- This factor determine the impact that influence legal laws and legislations
that operations and functions of company. All types of legal laws and legislations are included in
these factors which are consumer laws, labour laws, health and safety, international as well as
restrictions and regulation of trade (Mukhtar, Williams and Shaw, 2018). This factors shows that
India is the legal landscape. The country is known for its destination for foreign direct
investment. India has come up with many legal changes that increases the minimum wage rate
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(Rudd, Jaakkola and Marshall, 2016). These legal laws and challenges affect the cost as well as
demand of companies. The best solution is that they also focused on the operations of company
such as Trade Mark Act 1969, Consumer Protection Act 1969, Essentials Commodities Act 1955
etc. These laws are very important in order to expand the business as well as corporate sector.
These laws affect the operations of Hawthorn in both positive and negative as if government
allow some leniency than it will be profitable for company and if government is very stick than it
become tough to work in the country.
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Illustration 2: PESTLE ANALYSIS
(Source: Pestle Analysis, 2017)

MARKET MODES OF ENTRY
Mode of entry means when company wants to enter in the international market. There are
various channels to get entry in the market such as exporting, licensing, franchising, turnkey
projects, strategic alliance, joint venture and wholly owned subsidiary. Company has to select the
best option when company wants there products and services into the market. Hawthorn
company is leading clothing company in United Kingdom. This company wants to expand there
business in India. Thus, company will choose three models of entry which are exporting,
franchising and joint venture (Foxall, 2014). These are the best modes for Hawthorn to enter in
the market of India. Hawthorn is a small scale business and for small scale industries these are
the best modes.
Here are the description of following modes of entry-
Exporting- Exporting is defined as the selling of products in another country. It is sale of
domestic goods and services which is also known as cross boarder sale. Exporting is the best
option for Hawthorn to expand there business in India. This is the traditional and old concept of
taking entry in the foreign market. There are mainly two types of exporting which are direct
exporting and indirect exporting. Direct exporting is defined as the selling of goods and services
directly in the country whereas indirect exporting is defined as the selling of goods and services
with the help of agencies of home country such as exporting companies which handles the
selling of goods and services at their own behalf. Hawthorn can easily enter in the market
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without making any investment in foreign country (Webster, 2017). In exporting, company is
responsible for planning, managing and controlling the market research, logistic of shipment,
invoice and foreign distribution.
There are some advantages and disadvantage of direct exporting which Hawthorn
company face are as follows-
ADVANTAGES DISADVANTAGES
 Hawthorn can enter and captured in the
foreign market by earning foreign
exchange.
 Huge employment opportunities by
exports.
 Sales of company is increases.
 Profit of company is also increases.
 Hawthorn has to handle market
research, logistic of shipment, invoice
and foreign distribution.
 Hawthorn also faces space as well as
time issue.
 Political as well as legal issues.
 High duties of export.
Franchising- Franchising is the strategy to enter in the foreign market. It is the type of
entry where semi-independent owner of business (franchisee) pays free and royalties to the
franchiser to use the trademark of company and sell there products and services. All the terms
and conditions of the entire package is depended on the contract, even so it includes tools,
equipments, training of staff, manual management, approval of locations and operations.
Hawthorn can also use this method to enter in the market because franchising is broadly used
methods as it is rapid way to expand there business in India successfully (Giannakis and Harker,
2014).
There are some advantages and disadvantage of direct exporting which Hawthorn
company face are as follows-
ADVANTAGES DISADVANTAGES
 This method is less risky as compare to
other as it is capitalized on already
flourishing strategies.
 Cost is very high as capital investment
is very high.
 Control is very less.
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 Hawthorn will get there products and
services sell by its established a market
share.
 Hawthorn can build a good relationship
with suppliers.
 IT is cost effective expansion.
 There are huge legal actions.
 If the performance of franchise is bad
than it affect the reputation of
Hawthorn.
Join venture- It is also a type of market entry where a commercial enterprise undertaken
jointly by two or more parties which otherwise retain there distinct identities. It is usually
featured by shared ownership, shared risk, shared returns as well as shared control and
governance. Hawthorn company can also enter in the foreign market or India by making
agreement jointly with another company. There are many reasons why company select joint
venture option as it help company to enter in the international market easily by accessing to
technology, management skills, in order to gain entry to a foreign market and accessing to
channels of distribution, R&D and manufacturing are the features of joint venture. Like
hawthorn can make joint venture with Chandon Wine and East India Company.
There are some advantages and disadvantage of direct exporting which Hawthorn
company faces are as follows-
ADVANTAGES DISADVANTAGE
 Hawthorn can earn profit at low cost.
 It s flexible in nature.
 Cost, benefits, risk and expenses are
shared among the partners.
 Unlimited liabilities.
 When there is agreement than
flexibility is restricted.
 Integration as well as cooperation is not
up to the mark due to variety of cultures
and style of management (Hajli, 2015).
 The aim and objectives of venture are
not clear and they are not
communicates to stakeholders.
RECOMMENDATIONS
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All the modes of entry which are discussed above all are effective for Hawthorn company
to expand its business in India. But exporting is the best method for Hawthorn to enter in the
market of India. Company should select Direct Exporting method for expanding its products and
services in India. This is the best mode when company enter initially in the market. By exporting
company can significantly and rapidly expand there business. Company should increases there
level of product so that company can earn more profit margins (George, 2017). Exporting is cost
effective method so Hawthorn should choose to export and sell there products and services to
India by export. By doing exporting, company can know and understand there customers in
better way and after than they will take decision of choosing franchisee and joint venture to
expand there business.
MARKET SEGMENTATION AND TARGETING
Market segmenting is the systematic process of dividing the customers into different
categories based on different features. The reason behind the segmenting the market is that it
help company to identify its customers who are most likely to purchase the product of
organisation. It is not possible for any company to serve all type of customers. There are variety
of people and all have different exception and demand which is not easy for company to full-fill.
It is fact that companies can serve much better to some segments rather than targeting entire
market. Hawthorn company also divide its customers according to the same characteristics,
feature, demand and behaviour of customers (Paley, 2017). There are four types of market
segmentation which are as follows-
Psychographic Segmentation- This is type of division where customers are divide on the
basis of there lifestyle such as attitude, behaviours, interest and value that assist marketers to
separate them into a small group. This is quite difficult for Hawthorn to select this type of
segments when the market and customers all are new. It is quite advance. At initial stage it is not
supportive. This segment is very complex segment as compare to all because hawthorn company
is going to expand there business in new market and it is very difficult for them to identify and
understand the attitude, behaviour, interest and values of customers.
Behaviouristic Segmentation- This is the type of division where customers are divide on
the basis of there loyalties and honesty towards the brand of the products. In this segment
customers are divides on there choices, preferences as well as decision making. Hawthorn can
choose this segment and divide the audience it's those who knows about the product of company,
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ex-users, potential users, current users and fresh time users. This is also one of the best segment
that hawthorn company can use.
Demographic Segmentation- This is the type of division where audience is divided on
the basis of gender, age group, income, place and occupations. This is the most common as well
as easiest method that company used (David and David, 2017). Hawthorn is dealing in clothing,
so company cam produce all types of goods on the basis of gender, age group, income, place and
occupations. In order to target the customers, this segment is one the best and simple as compare
to all segment as Hawthorn company does not have to make extra efforts to study the needs and
demands of customers.
Geographic Segmentation- This is the type of division where audience is divided on the
basis of geographic area, location or place. Hawthorn has to fulfil the needs and demands of
customers where they are located (Source: Market Segmentation, 2017). Different area or places
have different needs and demands which is somewhat according to the culture of location.
Targeting is the second step as after the dividing the customers into segments. After that
company will select one of more segment and start targeting. Hawthorn is dealing in clothes so
company will majorly target there customer of psycho graphic and geographic segments because
this is the simplest method when company enter in new market.
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Illustration 3: Market Segmentation
(Source: Market Segmentation, 2017)

PORTER's GENERIC STRATEGIC MODEL
This is the model which is developed by Michael Porter in 1980. This model is used by
company in order to examine the competitive behaviour that make the business successful.
Hawthorn will use this model so that it can achieve success in the international market. This
model help company to determine its right direction (Thrassou, Vrontis and Bresciani, 2018).
There are three strategies in this model that company will select to achieve success in the market
which are as follows-
Cost Leadership- This is strategy in this model states that company cam achieve its
greatest height when its offer its products and services at lowest possible cost in the industry.
Hawthorn is going to expand its business in new country so this is the best strategy for company
to captured the largest market share as well as beat its customers (PORTER's GENERIC
STRATEGIC MODEL, 2017). It should be ensure that price should be remain low with better
quality. Hawthorn can apply this strategy successfully usually have substantial investment capital
at their disposal, efficient logistics and low costs when it comes to materials and labour. The
organisation is generally focused on internal processes.
Differentiation- This is the competitive strategy that company used when the product or
services they are offering is entirely different as well as unique in the market. Company can
achieve the highest profit and largest market share if company focus on differentiation of
product. Hawthorn can also use this strategy and offer unique design of clothes in the market. It
should be ensure in this strategy that product should remain unique from its competitors.
Effective marketing is important, so that the market understands the benefits of unique product
of Hawthorn. It’s important to be flexible and to be able to adapt quickly in a changing market
Focus- There are two strategies in this factor which are cost and differentiation focus.
This is the best and the most successful strategy of this model. Company can achieve the highest
heights if company focus on its cost and differentiation both. It should be ensure if Hawthorn is
following this strategy that cost should be remain low with unique products so that the products
and services of Hawthorn will stay ahead of possible competition (Agic and et.al., 2016). This
strategy is quite difficult and challenging for hawthorn as in retail industry it is not possible that
the product remain unique for long time.
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RECOMMENDATIONS
From all the above strategy, cost leadership is the best among all for Hawthorn. With the
help of this strategy company can lead in the market with its products and give tough competitive
advantage to other companies. Hawthorn should use this strategy and launch its product with low
cost.
CONCLUSION
From the above report, it was concluded that marketing is the heart of businesses as
without company it is not possible to make the customers aware of the products. It is very
important for company to conduct all the activities of marketing in order to achieve success in
the international market. This report also included Pestle analysis tool in order to track the
macro-environmental factors that affect the operations and functions of the market. Further,
segmentation and targeting is also included in this study. In addition to this, Porter's generic
strategic model was also illustrated in this report.
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Illustration 4: PORTER's GENERIC STRATEGIC MODEL
(Source: PORTER's GENERIC STRATEGIC MODEL, 2017 )

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