Global Business Management: Michael Kors' South Africa Business Plan

This report provides a comprehensive business plan for Michael Kors' expansion into the South African market, with a specific focus on Johannesburg. It begins with an introduction to global business management and the context of South Africa, including its geographic, political, economic, and business environments. A feasibility study is conducted, reviewing the country and the city of Johannesburg. The business plan itself includes an external environment review using PESTEL analysis, market analysis, SWOT analysis, and outlines objectives and strategies for market entry. The plan also addresses implementation considerations and concludes with a summary of key findings and recommendations. The report aims to analyze the variables involved in a business venture and entry into a new market, particularly targeting the luxury fashion market within South Africa. The report is a great resource for students on Desklib.

Global Business Management

Table of Contents
INTRODUCTION...........................................................................................................................1
FEASIBILITY STUDY...................................................................................................................1
Review of South Africa...............................................................................................................1
Overview of Johannesburg..........................................................................................................3
BUSINESS PLAN...........................................................................................................................3
External Environment Review....................................................................................................3
Market Environment...................................................................................................................8
SWOT Analysis........................................................................................................................10
Objectives of Business Plan......................................................................................................11
Strategies of Market Entry........................................................................................................12
Implementation of business plan...............................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
The global business management refer to the process of managing or entering new
international market in which study of global trade and administration strategies is analysed. This
undertake the process of marketing, promotion, selling, finance and economical practices,
recruiting and other processes (Trompenaars and Hampden-Turner, 2011). The business
organisation are expanding their business in global market after the globalisation and mix
economy system of countries which allow the company to deploy their business. The report will
study the internal and external environment, feasibility of company as well as create a business
plan for Michael Kors which is one of luxury fashion company render various products including
sunglasses, apparel, bags etc.
FEASIBILITY STUDY
Review of South Africa
South Africa also famous as Republic South Africa is most sophisticated and largest
nation in the southern Africa. This is also popular as 26th largest nation in the whole world. The
overview of nation have been eliminated on the grounds of different elements which is
mentioned on their geographic, economical, political and other factors. Here are the brief review
of the country:
Geographic Overview
The country is lying between longitude 16degree and 33 degree and latitudes 22 degree
and 35 degree which is one of the most southernmost nation in the entire continent of Africa.
Most the interior of S.A. is vast like flat plateau covered by the Great Escarpment, the highest
and Easter stretch of which is popular as the Drakensberg consist of Mafadi, South Africa's
highest peak (Ferraro and Briody, 2017). The nation is popular for the forest and wildlife as well
such as Kruger national Park.
Political Situation
The country is stable and young nation which is dominated through one political group.
In may, 2009, Jacob Zuma became the president of after the city of ANC's securing more than
65.9% share of the votes. The organisation came in the ruing of alliance tripartite involving
SACP, COSATU and African Congress party.
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In the year of 2012, the party was re-elected and become the president of the nations for the
seconds of five years terms beating his competitors with a large margin of votes in Kgalema
Motlanthe. In the year of 2014, may, the recent election was held in the country for electing fresh
National Assembly as well as provincial legislatures in every province (Mendenhall ed., 2012).
This election was organised for the fifth time under the Universal Adult suffrage and first
election after the death of Nelson Mandela.
Economic Overview
Although the nation is still facing large issues with unemployment, inequality, poverty,
this is considered as the most developed and sophisticated economy in the entire Africa as have
successfully become effective and world class organisation in real estate, services of business,
finance, wholesale and production as well as retail or supermarket sector. This is the “Gateway
of Africa” for the business person or investors cause of the comparative enlightenment,
convenience in business dealings, ability to perform and continental expertise as a ground for
business services and critical review of the entire continental.
 Key Economic Development: There are 27.7% people who are still unemployed in the
S.A. Which is still one of the major issues in the nation. The growth rate of National
Treasury have decreased up-to 6% according to the study that signifies the nation
required employment opportunities for reducing poverty and increasing standard of
living.
 Business Environment: The business environment of South Africa is more challenging
but the organisation is still considered as one of the growing country. Issues consist of the
deficit, poor worker relations, lack of corruption and electricity and contain the developed
infrastructure, transportation, sound macro situation, legal structures and robust financial
frameworks etc. There are various cities on the nation which have developed the laws and
legislation for rendering more activities and environment of business and trading in the
city. Including Johannesburg, Pretoria, Cape town, Bloemfontein etc.
 Importing Industries in S.A.: Here are some largest and main importing organisation
dealing in local market:
1. Machinery including electronics
2. Mineral fuel involving oil
3. Equipments, electrical machinery
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4. Cereals
5. Pharmaceuticals and many others.
Overview of Johannesburg
The city is also known as the powerhouse of the Southern Africa and South Africa's
economy. It was formed in 1886 after the gold discovery on Reef, the city has develope4d into
the famous and world class place or city in the top famous cities: known as financial centre of
nation as well as Gauteng's provincial capital. Johannesburg is also considered as JSE Ltd's home
which is biggest stock exchange of the entire continent as well as the 16th biggest in entire global.
The city generates more than 16.5% of their nation's wealth and hire 12% workforce of country
up-to 12%.
The city contain headquarters of m,ore than 70 organisations of South Africa as it
provided proper resources and development opportunities (Nahavandi, 2016). The recent area of
metropolitan of Johannesburg was established in the year of 2000 through the consolidation of
five last independent areas of municipal. With the population of more than 3.2 million, it have
more than 10, 06, 930 households which is characterised by the residents of youthful, with 42%
of the people below 24 and age of 34 is more than 49% of population lived in S.A.
The population of city is developing everyday that is resulting the nation as migration to
the city from other parts of their nation which is causing increased household number, social and
economical infrastructure demands etc. This has a telecommunication, financial, municipal and
roads as well as other infrastructure. It includes two active powerhouses.
Aim: The major aim behind the study is to analyse the various variables which is
involved for business venture or entry of new market in the open economy as well as analysing
the target audience.
BUSINESS PLAN
External Environment Review
South Africa is one of the developing organisation which is expanding the business
opportunities specially in case of Johannesburg. The city contain more than 70% organisation's
headquarter and provide largely resource and management ease the companies which can be
reduce the issues of entering in new market of the country for a international organisation like
Michael Kors. The company is one the largest sunglasses company which render other products
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in global market. The organisation want to expand their business for which they require to
understand and identify the entire market for the purpose if achievement and success of strategies
or operations organised by company (Geppert, Matten and Williams eds., 2016). It is essential
for enterprise to evaluate the external environment for identifying weakness, strengths and
threats for the organisation development in the foreign market. Here is PESTEL analysis of
South Africa focusing on Johannesburg Specially:
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Political Factor The nation is in midst of election on local level
which is a positive aspect. The nation is
dominated by the corrupted political which
restrain the growth or development of the
organisation. ANC councillors claims to
remove the corruption from the political
system. But as it is politics, there are always
some politician which are often corrupted and
want to remain in power. There can be felt
instability in the country and city in the
political aspects cause of the election but it
depends on the party, weather it would be
useful for business organisations or not.
Social Factor This depleted the unemployment and currency
of South Africa which s bring influenced more
than 25% on the behaviour of buying of the
people. Rather than doing business, people are
more inclining toward new entrepreneurial
style which is affecting the organisation's
business and start-ups. But due to the higher
rates of unemployment, the people or citizens
are unable to purchase the raw material as well
as products for the development of products
and services. This can articulate the developing
entrepreneurship of the nations.
Economical Factor The currency value of South Africa is low at
this time in the market. The major issues
behind this instability of the currency of nation
is, Reserve bank affect the term and values of
Rand. This depend on the response of Reserve
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bank which determine the interest rates of
Rand that have made this weaken. In the recent
market, the currency value is subjected through
the forces of market. But with lesser exchanges
rates ad currency, the business of S. A. will be
influenced largely. In case of expansion of
business in South Africa, the weak economy of
a country can restrain and loss in the ent6ire
business operations of new organisation. Also
the higher rates of exchange and interest can
limit the companies in development making a
businessman life more difficult. It have been
noticed in 2014 that more than 88 long-
standing strikes were made in which worker
left their works for months which is not really
good thing for a business organisation. Also
the major trading partner of the county is China
which is facing loss in the economy and slow
market that depicts negative factors of
economic in Johannesburg.
Environmental Factor The condition of drought in SA was the large
knock on influence and require to be more
carefully through the organisation (Wild, Wild
and Han, 2014). The environment of entire
nations is better and effective which is
flavoured by every individual or travellers.
Though there are some organisation which is
created a bad influence on the nature of
Johannesburg for which the state will be taking
an action as soon as possible.
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Legal Factor The south African Law was are similar to the
United Kingdom legislative specially the
exporting laws and regulations such as
Customs and excise duties, Stamp Duty,
Capital increase tax, Skills improvement levy,
Transfer duty etc. Also the nation as well as
city have some fundamental rights or laws
which is recently functioning under the
revision, BEE charter for instance and the
mining acts. This is essential to understand by
an organisation that the government can
changes the entire environment by the blink of
an eye.
Technological Factor In the past few decades, South Africa is rapidly
increasing and developing for which they re
adopting new and advanced technologies in
their company for evolution of nation. The
rapid adoption of the modified technologies in
their business sector have been increasing the
productivity and performance of enterprise.
Disruption process is catered by the
digitalisation in the banking, retail travel and
another sectors (Scherer and Palazzo, 2011).
But it have been observed that there is thin
management and introduction advancement in
the area of technologies. Whereas state is using
the equipment and digital technologies for
reducing unemployment, reducing the
corruption level form entire Johannesburg and
South Africa. Business industries are catering
the technological alternation in the production
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of products and services which is not utilised
by the local entrepreneur as well as business as
it is too expensive to control and monitor such
tools.
Impact of External Environment on Plan
The political factors of the country are unstable which can restraint the growth of
company. An organisation whereas can choose the illegal ways to enter in the market of the
country. As Johannesburg is preferring to provide priority to the business organisation, the
company Michael Kors can easily expand their business. Economical factor are not in the
favour of nation which render the company opportunity to provide the stability to the city
through providing financial assistance (Govindarajan and Ramamurti, 2011). Though, there are
possibility of loss for the organisation itself as the people are not entirely developed and still
struggling for their rights. As there are most population is adult, the organisation got benefit from
social factors, to enter in the market of Johannesburg city also the company will render
opportunities of employment thus, they can get the support of government as well. Though the
Michael Kors s may has to struggle with the legal and legislative structure in the contrast case
with then ruling government in SA. As the company is forming only stores which do not harm
the environment of Johannesburg, there is no negative impact of the company on the activities
of business. Technological elements can render some limitation as well as growth to Michael
Kors as the company have good reputation in the competitive Global market. Thus, external
environment is in the favour of business but it always depend on the company how they interpret
and communicate with the general public.
Market Environment
The environment of business is the term of marketing which includes the elements and
forces of organisation ad its ability which create and manage the consumer relations of the
company successfully. This is the gathering of the influences of non-marketing things which can
affect the success of marketing manager. This is required for Michael Kors to analyse the some
market environment elements in order to understand and identify the target consumer and
consumer behaviour of the company to which the company is aiming. This help in reducing the
extra expenses as well as directly target to the desired audiences for the products and services.
These factors consist of income level of the citizens, market segmentation, culture and buying
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behaviour of consumers which is essential for the company for developing in the new and
foreign trade. Here is the brief of these elements according to the South Africa: Culture: The South African culture is more diverse and ethnic as people are more tending
toward their culture and religion. There are more rural inhabitant which direct the largely
impoverished surviving. However the culture and people are more inclining toward the
westernised and urbanised culture as well as the traditional aspects have been denied by
the people of country. The people are not exactly holding to their culture specially the
metropolitan citizens such as Johannesburg. They are likely to adopt the new
technologies, trends and style which is trending in the global market. There are stores of
the competitors companies of Michael Kors such as Parada, Oakley so the organisation is
also aiming to open a stores for development and expansion of the business activities.
This environment of culture is more positive in city of South Africa, Johannesburg. Also
the organisation can change the styles by making it more art and creative through adding
oval and traditional designs into it. Income Level: The new report of south Africa in regard of annual income have shown
that country have increased their gross salary up-to 35% in comparison of the da of 2003.
Citizen of nation are increasing their position for which the organisation is responsible
(South Africa needs to fix its dangerously wide wealth gap, 2016). According to the data
of aggregate income, people are earning is 3.897R and 7,443R. This is lower than it is
expected income which shows that then most of the population is to earning normal
income whereas the elite areas, people are earning more income.
 Buying Behaviour: The country is suffering huge issues of poverty and unemployment in
the competitive marketing industry. More than half million citizens of SA have come
over from the issues of poverty in developing market. People's standard of living have
been grown year by year in SA which is good for company. Through the nation is a
republic, the country is tolerating the issues of domination from the political parties
which is restraining the growth of Johannesburg. People are more inclined toward the
urban culture which is chance for Michael Kors for develop their own business and
expand their market in the global trade. The fashion of the nation goes hand in hand and
everyone is liking the foreign and popular brands. But due to less development and
higher poverty rates as well as unemployment in the nation, the country is facing the
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issues of lower purchasing rates in their nation. Though, organisation is dealing their
business in Johannesburg which is one the metropolitan and largest cities of the nation,
the purchasing if the city people is higher than the rural and other places of South Africa.
 Market Segmentation: Segmentation of market refer to the process of eliminating the
products and services according to the homogeneous market, demands, traits or wants of
the consumer. The market elimination is made for understanding the nature of target
consumer and aiming them more straightly and sharply for managing success of the
desired result of the company (Caligiuri and Tarique, 2012). The company, Michael
Kors is using the process of market segmentation for focusing over the target market
more sharply. Here are the three techniques which is used by the organisation for
reducing the chance of segmentation i.e.: Psychographic segments: in which the divide
process is done on the grounds of values, income and lifestyle of people. Michael Kors is
aiming to more higher and upper middle class people for the products and services as the
organisation is one of luxury brand. Geographic segments: in which the elimination of the
people is done on the elements of their geographic areas. The organisation have chosen
the Johannesburg city for dealing their business in entire South Africa as the city is more
elite and developed in the entire South Africa. The third segments is Demographic
segments: which refer to the division of the target audience on the grounds of the
customer demographic factors such as family size, gender, income, occupation, culture,
language etc. The company is focusing over the female and male which earn good
income and are capable in dealing with the cost of the products.
SWOT Analysis
Strengths:
 Government commitment to investment facilitation: The South African government
invites more and more foreign investors and they also facilitate the investors to take their
money back if the target are not achieved.
 Research and development activities helps in supporting new local technologies which
helps in achieving desired targets in effective and efficient manner.
 Strategic location: South Africa's seven business ports form by far the largest one of the
best equipped and most efficient network on African continent (Voegtlin, Patzer and
Scherer, 2012). They work as strategic transshipment hubs for traffic connecting Europe.
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