Strategic Analysis of River Island's Market Entry in Malaysia

This report provides a comprehensive analysis of River Island's potential market entry into Malaysia. It begins with an introduction to international marketing and the specific context of River Island's expansion plans. The report includes an executive summary outlining key findings and recommendations. The background section analyzes the Malaysian market using PESTEL and Porter's Five Forces models to assess the political, economic, social, technological, environmental, and legal factors, as well as competitive forces. It also addresses the terrorism threat, which is a significant concern for businesses in Malaysia. The report then explores various market entry strategies, including direct exporting, licensing, franchising, joint ventures, and greenfield investments, recommending franchising as the most suitable option for River Island. Finally, the report discusses marketing mix decisions, including product adoption, product standardization, and target market identification, to help River Island effectively promote its products and services in the Malaysian market. The analysis aims to provide a strategic framework for River Island's successful international marketing venture.

International Marketing

Table of Contents
INTRODUCTION...........................................................................................................................3
EXECUTIVE SUMMARY.............................................................................................................3
BACKGROUND.............................................................................................................................3
PESTEL Analyses..................................................................................................................3
Porter's five force....................................................................................................................5
Terrorism Threat.....................................................................................................................6
Market Entry strategies...........................................................................................................6
Marketing mix decisions........................................................................................................7
CONCLUSION ...............................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
International marketing refers to the exchange of goods and services beyond the national
boundaries. It is a multinational process of marketing concept like planning, execution,
promotional tools and distribution of goods and services to their customers. The present report is
related with the River Island which can a clothing retailer in United Kingdom (Fletcher and
Crawford, 2013). As per the given case study company wants to expand their business in to
Malaysia. In this regard, environmental analysis is conducted with the application of appropriate
models such as porter five force model and other related. In addition to this, terrorism threats is
analysed with respect to selected country. Moreover, marketing mix has been applied to start the
operation of the business into the new market.
EXECUTIVE SUMMARY
As an international business organisation, there are various issues which affect their
international marketing at the global level. Therefore, it is required for Multinational Corporation
to analyze factors such as cultural, political, economical etc. in the international market. It is
required to develop strategies accordingly to attain their long term goals and objectives. The
present report is based on River Island which is a fashionable retail chain in United Kingdom and
operate their business across the globe. There are two types of approached which can be used by
the company in order to expand their business. The first concepts is called proactive stimuli
which is related with the why company going to expand their business due to its product
advantage, uniqueness of products etc. On the other hand, Reactive stimuli related with the when
firm's are facing challenges in order to sustain in the market due to competitive pressure,
overproduction, etc. in the context of River Island the firm's is expand their market due to
decrease in the market share and their competitive pressure.
This report is related with the research on how a company can expand their business in
Malaysia. Therefore, River Island need to develop appropriate strategies and market strategies
which can help to provide sustainable growth to their enterprise. River Island is going to use an
appropriate market entry strategies in the context of Malaysia company can use greenfield
investment or franchising in order to expand their market.

BACKGROUND
Porter's five force
It is important for a multinational corporation to analyses their competitive position in the
market and what competitive forces can affects its business operations in the near future. Porter's
five force model help to River Island in to order to determine their competitive force in Malaysia
market which can help to make their long term decision (Cadogan, 2012).
Competitive rivalry: This is one of the major component in the five force model which
is related with the number of competitors in the market. Therefore, River Island required that to
careful analyses and evaluate competitors capabilities which are equally offers attractive
products and services. It is important for business unit is that, there are limited rival companies
in Malaysia which can provide help to offer their products to their target market.
Bargaining power of suppliers: It is another element of competitive force model it is
also provide provide benefit to the company. Because, there are large number of suppliers in the
South-est Asian region which can provide option in order to buy row materials and other
products. There are various country like India, China where they can import their row material
and components which can reducing the bargaining power of their suppliers and provide
competitive advantage for River Island (Evers, Andersson and Hannibal,2 012).
Bargaining power of customers: This force look at the bargaining power of buyers
which can affects price and quality. If there are large number of sellers in the market, it can
increase the bargaining power of customer. In the context of River island, there are limited seller
in the market which can less impact on the competitive position of the company.
Threats of new entrants: Malaysia is a growing market for multinational companies
which can attract more and more company in this industry. Apart from that, there are domestic
companies as well which can also having large impact on the business and its profitability.
Threat of substitute products: River Island is retail firm's which offer wide range of
clothing with unique design to its customers (Cavusgil and Cavusgil, 2012). But, in Malaysia
there are various local vendors which can offer same range of products at the lower price which
can reducing the competitive position in the market.

Competitive analysis: It is very necessary to identify the competitors in the marketplace and
also evaluate the strategies which is use by them to calculate the strength and weakness of the
product and services. River island has many competitors in the market and they want to compete
them for this they continuously develop their products with more innovation and creativity. For
better analysis company need to find out the competitors. If the price of the product of River
island is lower compare to the other companies then they can also take advantage from the
competition. It also helps to reduce the market gaps and increase the product development. There
are various objectives of competitor analysis which is mentioned as below:
 It helps to forecast the demand and supply.
 It helps to increase the market share of the River island.
 It provides growth to the company.
 A perfect analysis helps to expand the business of River island.
 It is very necessary to development of the company.
 For competitor analysis it is necessary to understand the strategies of the competitive
company.
Competitor analysis depend on the size of the River island. It is also necessary to analyse the
culture, profitability, reputation, objectives, strategies, strength, weakness, cost structure etc.
Technology: This is one of the important factor which having a great influenced on the
business operations of the cited business organisation. In order to maintain competitive
advantage over its rival firm's River Island required to use innovation and technology in its
business practices. For example, firms can use social media in order to promote their products
and services.
Terrorism Threat
Terrorism is a major threat for business activities in Malaysia. There are various terrorist
groups such as Tehreek-e- taliban, Lasker-e-Toiba, Hizb-ul-Muzahideen etc. seek to cause harm
to the economy of the country. Such kind of threats are create a serious problem for international
business organisations which are operate their business in Malaysia. Therefore, River Island
required that to careful analyses these potential threats on their business. In recent time there
large number of terrorist violence happening in that country which is not easy to expand their
business. For a international organisation it is required that to carefully analyses its expansion
decisions in the countries where potential terrorist threats are avail. If they can not study this

global factors they can lose their investment which is not affordable to them (Chandler and
Graham, 2010). Thus, they required to communicate with the government of Malaysia and their
security agency which can provide enough security to them.
Market Entry strategies
There are various ways in which business organisation can enter in to foreign market.
There are no specific strategies to enter the international markets. These strategies can be used by
the companies according to their profitability and market potential. Therefore, River Island
requited that to identify and select appropriate strategies which can help to inter in to Malaysia
market. These strategies as given below:
Direct Exporting: In this market entry strategy company can direct export their product
and services in to particular country. Various companies are use this tool through selection a
distributor in the host country and selling their product and services. This is one of the cost
effective strategies for business. River Island required that to select a suitable agent or
distribution in Malaysiai which can represent firm's interest (Cadogan, 2010).
Licensing: This is another approach which can allow for a organisation to transfer the
rights to use firm's products and services to another company. This strategies is useful when
there are large market share of partnering company in the host country. River Island can provide
license to another company Malaysia which can help to increase their presence in the market.
Franchising: This is another approach for rapid market expansion in the different part of
the world. In this market entry strategy, firms can provide right to use their brand name and sell
their products on the behalf of the company. River Island can be used such arrangement which is
more appropriate and cost effective to them.
Joint venture: It is a particular form of partnership where two or more companies can
make a new business organisation. This concept is more useful in the fast growing economies
such as India and China, where more opportunities are avail as compare to other developing
countries (Chung, 2010). This approach is not use in the context of Malaysia due to unstable
business environment.
Greenfield investments:This is another strategies which can help to the business unit in
order to enter in to particular market. It required large amount of investment where a
organisation buy land, building and other facilities and operate their business. This is more risky

for a company specially those countries where market is more vulnerable. This approach is not
sortable in the context of Malaysia where large number of factors involved specially terrorism.
Thus, River Island required that to chose Franchising which is most suitable market entry
strategies in Malaysia where risk are quite limited as compare to other strategies.
As per the above described market entry strategies the cited business unit can chose joint venture
and Greenfield investment in order to enter Malaysian market.
Joint venture: This is one of the most suitable market entry strategy for the cited business unit. It
having more advantage as compare to other strategies. There are various fashionable stores
operate their business in the domestic market. They having more experienced in such market.
River Island can approach these units so that they can increase their market share and revenue.
Greenfield investment: This is another option for the cited business organization where they can
invest large number of amount in to the particular country. There are various factors which can
be considered by the company before investing such amount in to the Malaysia. These factors
can be government policies, political stability, and other factors. Malaysia is politically stable
where they can invest their amount and expand their business. The another factors which can be
focused at the time of greenfield investment is economic factors like per capita income, growth
rate, employment rate etc. these all factors in the context of Malaysia are favourable for the River
island and they can invest their money in to the country. It can help to attain their long term goals
and objectives in an effective manner.
Product adoption: This is a systematic process where the marketing department of River island
require dot create awareness about the products and then develop interest. Before launch in the
market they required to test its product in to the market and make their decision accordingly.
Product standardization: This is one of the important aspects which is related with the create and
develop unique standards which can satisfy the customer needs and improve business
performance. It can provide competitive advantage over rival companies in the market.
Identify target market: This is one of the critical part for the marketing department. The cited
business unit is required to conduct market research and take feedback from their existing
customer. It can help to know the changing needs of their customers so that they can make their
product accordingly.

Marketing mix decisions
It is important for every business organisation to promote their products and services in
the market effectively in order to target their customers. There are various tools which can help
to attain firm's goals and objectives. Marketing mix is a strategies which can involved product,
price, promotion, and place (Kotler, 2012). These elements can be used by River Island to attract
customer in Malaysia:
Product: River Island is one of the most famous fashionable brand in United Kingdom.
Company operate their business in to various countries. They provide high quality products with
the greater range to its customers. In the context of Malaysia, business unit required that to
conduct customer research of their target market (Diamantopoulos, Schlegelmilch and
Palihawadana, 2011).
Price: Price determination is one of the significant element of market mix which can help
to increase market share and revenue of the organisation. There are various strategies such as
skimming pricing, competitive pricing and other strategies can be used by River Island. Malaysia
is a developing country where middle income groups can be targeted by the firm's.
Place: These is another element of market mix where company is focused on the
distribution channels. It is required for every business unit the availability of goods and services
at the right time and right place. Therefore, River Island can open their stores at the strategic
location such as most populated area in the country (Gaston-Breton and Martín Martín, 2011).
Promotion: As a multinational company River Island required that to more focused on
the promotional campaign of their brand and product. There are various promotional tools and
techniques such as advertising, direct selling, sales promotion etc. can be used by the
organisation.
Cultural aspects of Marketing: Cultural behaviour can affect the marketing of the River
island. Every country and organisation has their own culture that they follow. Every culture has
their own rules and regulations also. Cultures are set rules or values of an individuals and they
act according to their culture. Cultural factors also affect an individuals buying behaviour at the
marketplace. Culture can be divide into various types such as age, religious, gender, status etc.
they all have their own characteristics.
In Malaysia, people who lived there are of various culture so River island need to focus on each
and every culture to fulfil the demand of every customer. They can divide market according to

the age of people and their culture. They also need to focus on every type of fashionable products
to take the competitive advantage and increase the profit. Also they need to provide goods and
services at a reasonable price to their customers. They also need to develop their products with
innovation and creativity. By focus on every culture they build their image in the market that will
help to increase their market share. They also use innovative methods for marketing such as
social media marketing.
CONCLUSION
As per the above mentioned report it has been concluded that international marketing is
more complex and competitive as compare to domestic marketing. It can be influenced by
various external and global factors such as political, economical, technological, legal and
terrorism. This report is also explained about how a company can enter in a foreign market in
order to expand their business activities. Further, marketing mix which can involved product,
price, place and promotion which can help to target their customer and attain its long term goals
and objectives.

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