International Marketing Management Report: Prada's Strategies

This report provides a comprehensive analysis of Prada's international marketing management. It begins by examining the impact of globalization on the fashion industry, highlighting how trends such as increased international trade and interconnectedness have influenced Prada's business operations and market expansion. The report then delves into an environmental analysis, utilizing tools like PESTLE and SWOT to assess the political, economic, social, technological, legal, and environmental factors affecting Prada's international ventures. It also analyzes Prada's internal strengths and weaknesses, and the opportunities and threats in the global market. Furthermore, the report conducts a competitive analysis, employing Porter's Five Forces to evaluate the competitive landscape and Prada's position within it. The analysis considers factors like buyer power, supplier power, and the threat of new entrants and substitutes. The report concludes by summarizing the key findings and implications for Prada's international marketing strategies.

International Marketing
Management
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TABLE OF CONTENTS
INTRODUCTION ...............................................................................................................................3
GLOBALIZATION..............................................................................................................................3
ENVIRONMENTAL ANALYSIS........................................................................................................4
COMPETITIVE ANALYSIS...............................................................................................................6
CONCLUSION....................................................................................................................................7
REFERENCES.....................................................................................................................................8
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INTRODUCTION
In the modern era, marketing plays a very important role in growth and development of
organization. It can be defined as a process through which businesses increase their sales and
profitability by creating brand awareness in the market. Number of business organisations is focusing
on marketing strategies in order to expand business in international market (Markides, 2012). Current
study will focus on work culture of Prada to understand key aspects of cross border marketing. In order
to increase market share and profit margin ratio, the organisation can focus on international marketing
management.
GLOBALIZATION
Globalization is considered as an effective process of integration along with the interaction among
firms, people and government of different nations. This process directly influences the environment
and political system which is linked with the economic development of nation. Main trends in
globalization involve the range of opportunities that it provides to business. Further, it has become
possible for any organization to operate efficiently at the global level and expansion at international
level has become easy (Uncles, 2015). Moreover, it has enhanced export along with the import practice
of every nation. In short, globalization has played a significant role in the economic development of
every nation. Trends of globalization have positively affected Prada where it has become possible for
business to operate efficiently in the market. Apart from this, business is able to operate efficiently in
other markets for enhancing the performance at international level. Trends associated with
globalization have enhanced profitability along with the market share of business. Through expansion
at global level, Prada has gained large number of benefits which means resources of different countries
can be used in the production process to have access to wider market and for the procurement of input
goods and services. But on the other hand, some disadvantages of globalization are present which are
adversely affecting the business performance and they are like economic condition of country may
affect the business condition, rise in level of competition, etc.
Globalization is procedure that provides effective interaction and integration within
environmental aspects. It allows number of elements to work in collective manner such as people,
organisations and governments. In other words, it can be said that it allows Prada to trade ethically in
international market with optimistic use of information technology. Globalization is considered as a
worldwide business activity that considers various aspects in integrated manner (Dibb, 2010). For
effective business expansion, it is essential for management of Prada to consider economic, financial,
trade and communication aspects of different nations in appropriate manner.
With an assistance of globalization, the management of Prada enhances the local and
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nationalistic perspectives in appropriate manner. It allows business to provide its products in
international market by considering global factors. It includes free transfer of goods, capital and
services within nations. In this support, it can be said that there are number of benefits and
disadvantages of globalization that need to be considered by management of Prada (David, 2011). One
of the key benefits of globalization is that company can easily have effective contribution of
technology for proper development. With an easy accessibility to technology, the business can reduce
the cost of operational activities. It also allows business to build strong trade relations with global
competitors. It also motivates employees to learn more about overseas market which is beneficial for
skills improvement (Cravens, 2010).
On the other side, it can also influence business in negative manner. For example, to expand
business in international market, number of legal consideration are needed which may increase the cost
of operational activities. Various modifications are also required in products and services as per
standards of trade unions which may also increase expenditure of firm. Moreover, the economic
conditions of any nation can also influence the business of Prada in negative manner. Company will
also face high ratio of competition in the global market (Markides, 2012). Availability of resources can
also be one critical issue for business that affect operational activities in diverse manner. For effective
expansion of business in international market, the management need skilled workers. But in global
market, the demand of skilled employees is low which may impact the business of Prada in negative
way. Global companies with hi-fi infrastructure almost ruin the local traditional small and medium
industries (Bose, 2008). It means Prada needs to ensure about these aspects in appropriate manner for
effective development of market share in global market.
ENVIRONMENTAL ANALYSIS
In order to have effective business expansion, the organisation needs to understand
environmental aspects in appropriate manner. There are number of tools that can be used to analyse
these aspects of Prada. Classification of tools can be as Pestle, Swot, etc. Pestle analysis is technique
that facilitates in effective determination of various external factors which may influence operational
activities of business. Prada is required to analyse external factors while developing its distribution
strategy.
Political: It is an element that helps in determination of degree to which governing authorities
affects the operational activities of the business. It is essential for management of Prada to understand
political aspects in appropriate manner. In this respect, organisation needs to consider tax and duties
which are obligatory by government. Company needs to consider different nation’s political aspects
while expanding business in global way (Nikolopoulos, 2015). Therefore, while developing
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distribution strategy for new international venture, Prada is required to take care of political
environment of the country in which it is planning to operate. Trade regulations along with the laws
directly affect the productivity of Prada where it is necessary for business to comply with the
government regulations so as to operate efficiently in the market. Apart from this, overall regulations
are changed due to which Prada has to ensure that its practices are as per the legal requirement.
Further, it considers the payment of duties and other types of taxes which business has to comply
necessarily.
Economical: It is also essential for management to consider economic aspects as critical
element because it influences business in diverse manner. Management of Prada needs to ensure about
global economic conditions for better opportunities in international market. Pricing of products and
services also need to be designed as per economic aspects (Jacob, 2011). In the support of this, it can
be said that the crises in international economic system can influence business in negative manner.
Exchange rate affects the overall performance of Prada as it is associated with the import and export of
materials. In case if the currency of any specific economy increases then business can operate
efficiently in the market and vice versa (Pauwels, 2012). Apart from this, economic growth of nation
also matters as in the east countries, growth of nation is quite less and due to this reason, companies are
not able to operate efficiently. Further, economic crisis taking place in the west influences the overall
performance where organizations have to deal with the unfavourable situation like in case if there is
lack of finance in the firm.
Social: It means the social aspects that are present within market need to be considered as
significant aspect while expanding business in international market. Improper consideration of these
aspects can influence business in negative manner. In this support, it is essential for management of
Prada to ensure that demographic needs has been analysed in appropriate manner (Lien, 2015).
Cultural needs of every nation are different so it is one of critical task for organisation to identify
cultural needs in suitable manner. Further, market trends are changing at a faster pace where customers
prefer to buy new type of clothing products along with the apparels. Therefore, Prada has to consider
changing trends in every market. Apart from this, element of culture is also crucial where business
operates in different markets and delivering products as per the culture and religion of every individual.
Therefore, it is also one of the major social factors that are affecting the performance of Prada in
market.
Technological: It can be defined as the rate of technological advancement and up-gradation in
the country. In order to have better opportunities, it is significant for management of Prada to ensure
about various technological up-gradations. Prada must invest more on technological changes so that
sustainability aspects can be maintained in most suitable manner. Improved level of technological
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support at international level is also beneficial for effective designing of strategies (Malhotra, 2008).
Prada must have advancement in production machineries to meet the international standards and gain
better competitive advantages. For boosting sales of product, Prada has employed different techniques
where social media and online advertising are the most common. Further, through this, business is able
to share appropriate information regarding its product range with its target market. Apart from this,
adoption of advanced technology has positively affected Prada where business is able to enhance its
performance at the global level.
Legal: In order to have better expansion at global level the management of Prada needs to focus
on number of legal documents. Company must follow legal rules and regulations as per nation and
international trade union's foe ethical opportunities in global market. If business will not follow legal
aspects in appropriate manner then company can face legal issues which may cause failure conditions.
Rules and regulations that are formulated by the governing bodies also need to be followed for better
opportunities in international market (Pauwels, 2012). Laws such as employment and consumer rights
affect the business performance where it is required for the management of Prada to manage its
workforce in an effective manner. Apart from this, firm has to consider the consumer rights where
business has to protect its target market by providing high quality product as per their expectations.
Environmental: It is also necessary for management of Prada to make sure that they are
considering environmental policies in most suitable manner. It will facilitate business to expand
business in ethical manner along with protecting environmental conditions. Any kind of avoidance in
these aspects can lead business to failure conditions because it affects operational activities in direct
manner. Business is working in favour of environment where main focus is on reducing the carbon
emission and it is having a positive impact on the brand image of organization. Apart from this, targets
have been set with the motive to save surroundings.
Strengths
 Prada is having global appearance that
increases its opportunities in global
market. Organization is more focused on
effective research so that innovate
products can be served in market.
Weakness
 Company faces issues regarding human
resource that impacts business in
negative manner.
 Number of substitute products is
accessible in market that influences
customer base (Uncles, 2015).
Opportunities
 Company can introduce number of
products with innovation designs as per
Threats
 The economic crises have lower down
profits of many global companies.
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customer needs. It will amend market
share and customer base in
international market. Company can also focus on various
social and ethical developments in
order to have better sustainability.
 Increased ratio of competition at global
level can influence business in diverse
way.
COMPETITIVE ANALYSIS
Competitive analysis can be refereed as the one of the most important part of any company's
marketing plan. In this support, it can be said that with an assistance of competitive analysis the
business firm can easily determine the status of products and services in the market. It also provides
information about company competitiveness among competitive market. It is a method in which
organization uses various kinds of tool and techniques to evaluate existing competition in a particular
marketplace. In this respect, porter’s five forces analysis can be one of significant tool to analyse
competition (Pauwels, 2012). Porter’s five forces is consists of five main forces which determine the
level of competition for businesses. It helps in understanding the key forces that can impact the work
culture of organisation.
Buyer power: It is beneficial to identify the power of buyers in the market. With an assistance
of this, organisation can determine the negotiation power of buyer. It has been evaluated that the power
of buyer is high for Prada because there are number of competitors are present in market that provides
same product at very low cost. Company have buyer from all across the world as it operates in wide
range of nations (Malhotra, 2008). Easy availability of competitor’s product forces customers to switch
to other brands. If organisation is not offering products and services as per customer's expectations then
it will influence business of Prada in negative manner.
Supplier power: It indicates the power of suppliers that operates businesses in the market. It has
been identified that the negotiation power of supplier is low which boosts opportunities for Prada. In
the support of this, it can be said that there are number of suppliers in market that provides essential
raw materials to organisation. If any kind of quality avoidance occurs by supplier then management of
Prada can charge for it and may cancel the contract with supplier (Lien, 2015). Easy availability of
resources decreases the negotiation power of suppliers. Prada has always made agreement with its
supplier which highlights that, the products and services will be supplied in a particular time period at a
given rate.
Competitive rivalry: There are number of competitors are available in the market that creates
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high competition for business. It clearly indicates that the competitive ratio is high for the Prada in
international market. Competitors are offering high quality product at low cost which impacts business
in negative manner (Jacob, 2011). In order to manage the competition at international level company
needs to improve its product line according to customer expectations.
Threat of new entry: It is all about the ability of new business in the market. Company is
operating its business in diverse nations so the treat of new entry varies as per domestic market of
different nations. In global market the management of Prada needs to analyse the competencies of
various organisations (Nikolopoulos, 2015). However, Prada is having good brand image in the market
so company is not having such threat of new entry. International expansion requires high ratio of
investment so it is hard for local companies to invest high because of their low profit margin ratio.
Threat of substitute: A substitute product can be termed as the one which offers similar
benefits which its competitor is providing to people in a market. It has been spotted that the threat of
substitute product is high in the market that influences business in negative manner. Customers are
always attracted towards innovative products and services so whenever any innovative product has
introduced in market the company faces issues (Bose, 2008). It means the management of Prada needs
to develop various innovative products according to customers’ needs to overcome the issue.
Above chart represents the overall sales of Prada group in different markets. In the market of US,
sales of company were 171.9 in the year 2011 and it has increased by 15% in the year 2012. This
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represents that business is operating efficiently in the market of America and customers are satisfied
with the products offered to them. Apart from this, in the market of Europe, overall sales were 250.7 in
the year 2011 and in the year 2012, it increased by 23% (Esho, 2012). This data states that in
comparison between the market of Europe and Australia, organization is operating efficiently in the
European market and it highlights that long term opportunities are present in a large amount in the
market of Europe as compared with America.
In country like Europe, Prada is highly successful due to presence of large number of
opportunities. Further, resources are easily present and accessible too. Apart from this, in the market of
US, competition level is quite high due to which Prada is underperforming in this market as compared
with the European market (David, 2011). Legal laws and regulations in European market are flexible
and this allows business to carry out overall operations in an efficient manner. Moreover, in the US
market, flexibility is not present and this acts as a hurdle.
In the entire market, Prada is positioned as a brand which delivers high quality products at an
affordable price. Positioning has been done on the basis of quality and other product attributes. This
has enhanced the overall performance of business at global level and in turn, Prada is able to deal with
the range of challenges which are present in the market. Its positioning strategy is quite effective and
has allowed gaining competitive advantage also. On the other hand, for Prada to gain competitive
advantage, it is required for business to focus on the quality and price. Further, business has to carry
out market research through which needs and requirements of different types of customers at global
level can be known easily.
CONCLUSION
As per the above study, it can be said that the international marketing management is essential
for better business expansion in global market. In the support of this, it can be said that the
globalization allows number of elements to work in collective manner such as people, organisations
and governments. It includes free transfer of goods, capital and services within nations. Moreover, the
globalization also allows the management of Prada to build strong trade relations with global
competitors.
Other than this, it can also be stated that the Prada is operating its business in various nations so
it is necessary for management to ensure that they have proper information about various factors. In
addition to this, it can be asserted that the environmental analysis and competitive analysis helps
business to expand operations in better way. Pestle and porter five force analysis are significant aspects
that provides information about various factors that can influence operational activities of Prada. It has
also been spotted that the Prada is having global appearance that increases its opportunities in global
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market. It boosts opportunities for organisation in diverse manner and lead business to impressive level
of success. For strong positioning of business in the global market, it is required for the management of
Prada to carry out market research for understanding the needs and requirements of target market.
Further, taking feedback from customers on continuous basis can be fruitful. Apart from this,
organization can indulge into practices of promotional schemes with a motive to attract the customers
at global level. All the recommendations provided can be fruitful for business and in turn, it can
contribute in the growth and development of organization in the market.
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REFERENCES
Books and Journals
Bose, R., 2008. Competitive intelligence process and tools for intelligence analysis. Industrial
Management and Data Systems. 108(4). pp. 510-528.
Cravens, D. W., 2010. Thinking strategically about pricing decisions. Journal of Business Strategy.
31(5). pp. 38-48.
David, I., 2011. Strategic brand management: Building, measuring, and managing brand equity.
Pearson Education India.
Dibb, S., 2010. Market Segmentation Success–Making it Happen. Strategic Direction. 26(9). pp. 20-
30.
Jacob, I., 2011. Strategic brand management: Building, measuring, and managing brand equity.
Pearson Education India.
Lien, D., 2015. The use and abuse of the hedging effectiveness measure. International Review of
Financial Analysis. 14(2). pp. 277-282.
Malhotra, N. K., 2008. Marketing research: An applied orientation, 5/e. Pearson Education India.
Markides, C., 2012. Strategic Innovation at the Base of the Pyramid. Cage.
Nikolopoulos, K., 2015. Fathoming Porter's five forces model in the internet era. Info. 7(6). pp. 66-76.
Pauwels, K., 2012. How retailer and competitor decisions drive the long-term effectiveness of
manufacturer promotions for fast moving consumer goods. Journal of Retailing. 83(3). pp. 297-
308.
Uncles, M., 2015. Sales promotion effectiveness: the impact of consumer differences at an ethnic-
group level. Journal of Product and Brand Management. 14(3). pp. 170-186.
Online
Esho, P., 2012. Prada’s Numbers Sparkle but Shares Edge Lower in Hong Kong. [Online]. Available
through <http://www.cityindex.co.uk/market-analysis/market-news/76332012/pradas-numbers-
sparkle-but-shares-edge-lower-in-hong-kong>. [Accessed on 5th March 2016].
Ten ways to improve your international marketing strategy. 2015. [Online]. Available through:
<http://www.marketingdonut.co.uk/marketing/marketing-strategy/exporting/ten-ways-to-
improve-your-international-marketing-strategy>. [Accessed on 29 February 2016].
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