Critical Analysis of Swarovski's Marketing Approach in India

This report provides a comprehensive analysis of Swarovski's global marketing strategies, specifically focusing on its potential in the Indian market. It begins with an in-depth comparison between adaptation and standardization strategies, crucial for international market success. The report then critically analyzes Swarovski's strengths and weaknesses, such as its skilled workforce and innovative products, while also highlighting limitations like limited market share. An analysis of external opportunities and threats, using a PESTLE framework, assesses the political, economic, social, technological, legal, and environmental factors impacting Swarovski's operations in India. The report further evaluates Swarovski's competitive landscape using Porter's Diamond, Blue Ocean Strategy, and Value Chain Analysis. It concludes with an assessment of entry mode strategies and the overall international marketing approach, providing valuable insights for Swarovski's expansion into the Indian market.

Global marketing
TABLE OF CONTENTS
1

Introduction .....................................................................................................................................4
In depth comparison between adaptation and standardization ...................................................4
Critical analysis of Swarovski strengths and weakness in India ................................................5
Analysis of external opportunities and threats ............................................................................6
Critical evaluation of Swarovski in the new international market ..............................................7
Target market selection and positioning .....................................................................................9
Critical analysis of entry mode strategy ...................................................................................10
Evaluation of international marketing ......................................................................................11
Conclusion ....................................................................................................................................12
References......................................................................................................................................13
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INTRODUCTION
In the present scenario, marketing has become very important for growth and success of a
business enterprise. Further, at the time of carrying out global marketing, organizations are
required to deal with various issues and challenges (Sheth, 2011). In simpler terms, it is defined
as marketing activities which are carried out on worldwide scale. The present report is based on
Swarovski which is an Australian based company which provides crystal jewellery and fashion
accessories . This report depicts in depth comparison between the use of adaptation and
standardization strategies in international market. .
In depth comparison between adaptation and standardization
It can be stated that at the time of operating in global business environment, businesses
are required to use effective strategies in order to achieve higher growth and success. There are
two common strategies I.e adaptation and standardization which are used by the organizations.
At the time of carrying out their operations in different international markets, companies are
required to take care of culture, language and other legal requirements (Hultman, Katsikeas and
Robson, 2011). Therefore, in order to comply with all these factors, businesses adopts the
strategy of adaptation. Further it is defined as the strategy in which organizations, deliver
products and services according to different needs and demand of people in various markets.
Companies which use strategy of adaptation are the one which offers different products in
different markets. As per this strategy, international products are developed in such as way that
they are able to meet local needs and taste, prices and all standards related to health and safety.
However, it can be argued that the use of adaptation strategy can increase overall cost of
operations.
In order to reduce this cost, organizations have an opportunity to create a core product
and can offer its different versions in various international markets (Griffith, 2010). On the other
hand the strategy of standardization strategy is adopted by businesses which believes that there is
a union culture among different countries with some similar needs and requirements. It is a
strategy in which companies offer almost same kind of products and services with the help of a
standard international strategy. In addition to this, at the time of carrying out international
operation marketing strategy do not differ from one country to another (Akaka, Vargo and
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Lusch, 2013). The advantages and disadvantages of standardization and adaptation are
mentioned below as:
Standardization Adaptation
Advantages Help in establishments of a
single coherent image in global
market
Allows businesses to develop
effective process of
communication
Respects local needs and
requirements in the best
possible manner
helps businesses to improve
their local image
Disadvantages The strategy of standardization
is not flexible
completely neglects local
needs and this can create
obstacles in growth and
success of organization
Increases the overall cost of
operations
management may face
difficulties in understand need
of customers in different
market
Critical analysis of Swarovski strengths and weakness in India
Swarovski is one the most renowned brand in the field of jewellery and fashion
accessories. Further it has opportunity to enter market such as India which is one of the most
potential markets in the world in terms of gems and jewellery. The core strength of Swarovski
lies in employees which are highly skilled and capable enough to manufacture products
according to the changing customers needs. At present the brand is having a staff of over 26000
employees which helps in carrying out smooth flow of operations. On the other hand, Swarovski
has its manufacturing plants in various countries such as China, Australia, United states etc. The
company is financial very strong which means that it has adequate funds available for carrying
out its expansion in other international markets. Unique and innovative products at regular
intervals is another key strength of Swarovski (Swarovski, 201). In terms of weakness, it can be
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stated that limited market share in some major markets has emerged as one of the core weakness
of the company. In addition to this, ineffective marketing and advertising has also restricted its
sales and profitability to a great extent. In addition to this, its core competencies includes
sustainable development, innovation, creativity and social responsibility. The above stated
factors has contributed a lot in overall Swarovski's overall success and in making the company as
a global brand. It can be stated that the chosen international market of India is highly potential
and thus it is going to provide Swarovski with adequate opportunities in terms of growth and
development. Its employees which are one of its main strength will help in offering new and
innovative fashion and jewellery products to customers in the new international market
(Leonidou, Barnes and Katsikeas, 2010). India market is one of the most diversified market in
the entire world and Swarovski is capable enough to meet the changing and diverse needs of
market with the help of its efficient research and development team. Other than this, by focusing
on its key strengths and core competencies, it will be able to carry out its operations and attract
customers successfully.
Analysis of external opportunities and threats
It is required by every business organization to become aware of external opportunities
and major threats which are prevailing in the country where it is planning to operate (Terpstra,
Fole and Sarathy, 2012). The Pestle analysis of new international market is mentioned below as:
 Political factors- India is considered among the largest democracy in all across the world.
Further, operations of businesses in the country are directly affected by policies of
government and the interest of different political parties (Turnbull and Valla, 2013). At
the time of carrying out its operations in India, Swarovski will be required to pay several
kinds of tax such as sales tax and other related tax.
 Economies factors- The economic environment of India is going to be the biggest
opportunity of Swarovski. Th country is economically very stable and has witnessed high
growth rate in last few years. Further, it has also encouraged foreign companies to invest
their capital and operate in the country. Swarovski will be getting adequate support and
back up from the economy of India.
 Social factors- The population of India is increasing at a very good pace and therefore the
business will not face any kind of problem in finding adequate number of customers
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(Vomberg, Homburg and Bornemann, 2014). Majority of the people in total population
belongs to age group between 15 to 65 years. In addition to this, the need and demand of
fashion accessories and jewellery among women in both higher class and middle class is
very common.
 Technological factors- Rate of technological advancements in the country is very high
and this is a very good external opportunity for Swarovski. It will allow the brand to
carry out its overall operations in more cost effective manner and earn higher profits.
 Legal factors- Increase in wages and elimination of discrimination among workers are
some current issues on which legal laws and regulations in the country are focusing upon
(Armstrong and Green, 2007). In order to carry out its operations effectively, it will be
required by the brand to strictly adhere to all legals laws and regulations prevailing in
India. .
 Environment factors- Swarovski will face a major threat from environment pressure
groups which has become active in last few years. At the time of operating in new
international market, it will need to ensure that its operations and activities do not create
any kind of negative impact of environment.
Market size
The jewellery market in the country can be termed as one of the fastest growing market.
Some factors which has resulted in high growth rate are rise in fashion among rural and urban
people along with innovations in designs (Bose, 2008). In terms of size, it can be stated that the
jewellery market of India contributes 6% to 7% of the total gross domestic product. In the year
2014-2015, it has generated revenue of 36.3 Billion US$ (Indian jewellery market, 2015). The
market is also receiving adequate support and assistances from government of the country.
However, it can be argued that along with high growth rate, the market is facing intense
competition among businesses. This will become a major threat in front of Swarovski as it is not
going to be easy for the brand to gain high market share and attract customers in situation of
tough competition in the market.
Critical evaluation of Swarovski in the new international market
As it has been already discussed that the jewellery market of India is highly competitive,
and thus, it is required by Swarovski to become well aware of all its major competitors in the
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new international market. In order to carry out competitor analysis of Swarovski three main
models which are Porter diamonds, Value chain and blue ocean strategy has been used.
Porter diamonds
The porter diamonds model is used identify competitiveness of a nation in global market.
The model consist of four major elements which are discussed below as:
Firm strategy, structure and rivalry- At the time of carrying out its operations in India,
Swarovski will be facing direct and strong competition from brands like Kalyan Jewellers,
Malabar Gold & Diamonds and Firestar Diamonds. The jewelry retailer will need to be highly
productive and innovative in order to gain advantage over other market players.
Demand conditions- The demand conditions in market are appropriate which means that
Swarovski will need to focus on constant improvements in its products along with maintaining
high quality.
Related supporting industry- Swarovski will be getting adequate support from all supporting
industries for carrying out its operation. This includes the getting raw material from different
sources and polishing of jewellery.
Factor conditions- Swarovski will have adequate facilities with regards to factor conditions. This
consist of easy availability of cheap and skilled labour in India, appropriate sources of finances
and satisfactory infrastructure facilities.
Blue ocean strategy
It is a kind of strategy which highlights the fact that in order to sustain in highly
competitive market, businesses are required to involve in head-to-head competition with each
other. According to this strategy, Swarovski will either required to opt for differentiation and or
must go for low cost in order to gain competitive advantage over other market players in India.
Further differentiation will encourage the company to attract more and more customers by
offering products which are completely different (Brown, Crabb and Haushalter, 2006). On the
other hand, low cost will allow Swarovski to lower down cost of operations and offer all its
products at low prices in order to attract customers and gain market share. If the firm adopts blue
ocean strategy, the company is going to make the entire competition in the country irrelevant by
creation of new boundaries.
Value chain analysis
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It can be stated that value chain analysis is an important tool which is used by businesses
in order to create the greatest value of products and services for all customers. Further, the value
chain will consist of two main activities which are primary and secondary activities (De Vries,
2006). The activities are mentioned below as:
Primary activities
 Inbound logistics- This activity of Swarovski will consist of movement of gems, raw
silver and gold from different suppliers to direct assembly plants. .
 Operations- It is going to the process in which Swarovski will be converting all its inputs
using sources such as labour, material and energy to valuable outputs.
 Outbound logistics- It is the stage in which Swarovski is going to store the finished
products which has been manufactured.
 Marketing and sales- At the time of carrying out its operation's in India, the brand can use
different online and offline sources to market its products. Services- This are the after sales services which Swarovski will need to provide to India
customers. It can include repair and polishing of the jewellery which has been sold to
people.
Support activities
 Procurement- It is the activity in which the good will be sourced from various places in
the country.
 Human resource management- The brand will need to hire local people which are capable
of producing and delivering innovative fine jewellery to customers.
 Technological development- Adequate opportunities will be present for the company to
carry out its operations smoothly.
Target market selection and positioning
Operating in new international market is never easy for companies and they are required
to face lot of challenges. It can be also stated that Swarovski needs to be very specific about its
target market along with segmentation and positioning. At the time of offering its products and
services to Indian market, the segmentation, positioning and targeting strategy which the
company is going to use is mentioned below as:
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 Segmentation- It is a kind of effective marketing strategy which is used by businesses to
divide its broad market into different subset of customers which has similar need and
preferences (Dibb, 2010). Swarovski will be segmenting Indian market on the basis on
income level. The three income groups which are prevailing in the country are high
income, middle income and lower income group. People in higher income group will be
targeted in the Indian market. Targeting- It is the process in which particular group of customers is selected to aim all
marketing strategies and efforts which are developed by the company (Doole and Lowe,
2008). Further, it can be also stated that a well defined target market will help Swarovski
to attract more and more customers. In order to operate in India, the market will consist
of women which loves unique and innovative jewellery.
 Positioning- It is a process in which organization places themselves in the marketplace.
Further, by carrying out positioning, companies explains why they are different from
other market players. Swarovski will position itself as a brand which offers and sale
unique and innovative jewellery.
Critical analysis of entry mode strategy
There are various entry mode strategy which can be used by Swarovski in order to carry
out its operations in India. Licensing is one of the strategy in which the company will be required
to go for little adaptation of product. Further it is suitable in countries which has liberal polices
of import and where the political risk is very high (Armstrong and Green, 2007). The benefit of
this strategy is that it provides organization with higher entry speed and lower down risk and
investment. However, it can be argued that the use of this strategy will result in limited access to
local information (Griffith, 2010). Another entry mode which can be used is of joint ventures in
which two or more companies from a venture with each other to accomplish some common
gaols. The advantage of this is effective operations as business combine their resources. On the
other hand, its drawbacks includes dilution of control and difficulties in management. Businesses
also use the strategy of direct investment for entering new international markets. This strategy
will provide organization with better knowledge in terms of local market. However, it can be
argued that it is more risky as compared to other strategies (Akaka, Vargo and Lusch, 2013).
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It can be stated that the strategy of direct investment will be more suitable as it will
provide the organization with higher sales and profits. Swarovski will be able to maintain its
distinctive image of being an independent jewellery manufacturer and seller.
Evaluation of international marketing
The international marketing of Swarovski will consist of four major P's which are
mentioned below as: Product- It is the good and services which will offer to all people in the market. While
operating in the Indian market chandeliers, Figurines, jewellery and couture, home decor,
loose crystal, elements are the products which will be offered to the customers. The brand
will take care of quality and unique design at the time of manufacturing its products.
Along with this, research and development will be carried to offer customers with new
product at regular intervals. Price- In simpler terms price is defined as the monetary value of a product or service
(Griffith, 2010). In order to launch its products and services in the market, Swarovski will
be using high price strategy. The rationale behind this is that the target customers and
segment of the brand consist of people which belong to higher income group. The use of
low price strategy will make customers feel that the quality of products is degraded.
Therefore, high price strategy is more appropriate for entering the market. Place- Place has become one of the most important element of international marketing
mix (Brown, Crabb and Haushalter, 2006). Companies are required to define appropriate
place from where they can sell their products and services. It can be stated that Swarovski
will be selling its products with the help of online and offline modes. Physical stores will
be opened in different cities of India from where customers will buy the product of
Swarovski. On the other hand, online store will be also open to make the entire process of
purchase more convenient for customers in new international market.
 Promotion- It is another major element in the international marketing mix which defines
how products and services will be carried out (Turnbull and Valla, 2013). Swarovski will
be promoting products and services with the help methods such as social media
marketing and mobile marketing. Events will be organized in various cities to make more
and more people aware about the products and services which are being sold by
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Swarovski. On the other side of this, advertisement will be done on television, newspaper
and near public places to promote products of Swarovski. The brand is going to make the
most effective use of the online and offline promotional tools.
CONCLUSION
From the above report, it can be concluded that it is very important for businesses to
develop effective global marketing strategies in order to sale their products and services. After
carrying out the analysis of India, it can be stated that there are adequate opportunities for growth
and development. On the other hand, the strategy of direct investment will be more suitable for
India marketing.
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REFERENCES
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