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Converse Final

Converse is considering expanding internationally and conducted research on potential markets. They analyzed India and Canada and found that India has strengths in labor costs and market channels that make it attractive. The presentation recommends India as the best target market. It proposes entering India using corporate-owned retail stores and an intensive distribution strategy. An aggressive promotion strategy is suggested along with projected profits showing profitability within two years of entering the Indian market. The presentation concludes Converse is ready to expand internationally and recommends India as the entry market.

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340 views

Converse Final

Converse is considering expanding internationally and conducted research on potential markets. They analyzed India and Canada and found that India has strengths in labor costs and market channels that make it attractive. The presentation recommends India as the best target market. It proposes entering India using corporate-owned retail stores and an intensive distribution strategy. An aggressive promotion strategy is suggested along with projected profits showing profitability within two years of entering the Indian market. The presentation concludes Converse is ready to expand internationally and recommends India as the entry market.

Uploaded by

Subin
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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I NTERNATIONAL B USINESS S TRATEGY

AND

G LOBAL

Presented By:

Subin Cherelle Sim Yuan Chern

Pornsupa Nimachaikul
Jerome Bertrand Ikechukwu Comedy Obialor

C OMPANY

BACKGROUND

Founded in 1908 by Marquis Mills Converse Converse is acquired by Nike, Inc in 2003. Distribution strategy:

Company owned retail stores


Licensing Others (wholesale, online)

Across 100 countries

P RODUCT P ROFILE

Consumer goods Converse is primarily a range of casual canvas footwear. Reached maturity stage in home market.

TARGET M ARKET P ROFILE

End user of product

Young people both sex

Sport players, rock n roll fans

Contrast end users from foreign VS domestic

North America & Western Europe South America & South Asia

SWOT A NALYSIS

Strengths - Global brand - Research and development - Differentiation - Sponsored athletes - Gained value coverage and brand value -Diversified range of sports products

Weaknesses - Companys income heavily depend on footwear - The limitation of the product used in informal occasion only - Price sensitive - Profit margin

Opportunities - Expand internationally


- Youth in India and China - Develop new product line

Threats - The fluctuation of currencies


- Copy cat product

C OMPANY S I NTERNATIONAL I NVOLVEMENT

The company used several methods to enter new market


Nike owned retail stores in host countries Nike has a lot of subsidiaries all around the world Nike Inc closed a joint venture with Alpargata, a local footwear manufacture and retail and formed Nike Argentina in 1994. Nike outsources all its production to manufacturing partners mainly in Asia, including China, Indonesia, Taiwan, India, Thailand, Pakistan, Philippines and Malaysia

P ORTER S F IVE F ORCES


Suppliers - Number of suppliers - Size of suppliers - Unique product - Ability to substitute Substitutes - Substitutes performance - Cost of switching - Buyer willingness

Barriers to entry - Time and cost of entry - Knowledge - Economies of scale - Technology - Cost advantages

Buyers - Number of customers - Buying volumes - Brand identity - Price elasticity

Competitive Rivalry - Number of competitors - Differentiation - Diversity of competitors - Switching cost

G LOBAL R EADINESS

OF

C ONVERSE

The company have to answer many questions to determine whether the company ready to expand aboard and suggest an entry mode strategy

After analyzed global readiness of converse we suggested to enter foreign market with these three entry mode -Foreign sales branch -Foreign sales / marketing subsidiary

-Company owned retail store(s)

G LOBAL M ARKET S EARCH

10 selected countries: China, Japan, India, Italy, Canada, Russia, Swaziland, Belgium, Israel, Austria Criteria selection for selecting target country: Demographic, Economic, Local consumption, Political and Legal environment

G LOBAL M ARKET

SEARCH

Best Markets: India and Canada

4. I N -D EPTH M ARKET A NALYSIS

India competition analysis: 2 companies: Action Shoes, local company providing footwear for the whole family, three decades of experience Fila Ltd, italian brand with a european design and high quality shoes Canada competition analysis: 2 companies: ASICS, best quality material to get long life shoes, sales average growth of 22%, personalized service New Balance, shoes fit, perform properly and look good. Marketing budget has been tripled to reach young people

4. I N -D EPTH M ARKET A NALYSIS


Financial and Market entry conditions:

Main criteria: Financial, Labour, Infrastructure, Market Channel Condition and Legal Environment.

India:

Labour and Market Channel Condition strength


Canada: Infrastructure and Legal environment

strength

B EST TARGET M ARKET -I NDIA

E NTRY M ODE AND M ARKETING S TRATEGY

Product/Market Strategy

the product to be marketed like some existing product or something related to local environment. Marketing Goals: Create market recognition. Gain market share. Gain and maximise profit.

Pricing Strategy Penetration/ Marginal Cost

P ROMOTION S TRATEGY

Magazines and News papers- Print media Outdoor-bill boards Bill boards and poster system is widely used for promotion in India.

TV
Internet

D ISTRIBUTION S TRATEGY

Intensive distribution The distribution strategy in India would need to be an intensive situation through many shops. Situation where suppliers and distributors enter into an agreement that only allows the named distributor to sell a converse footwear. This is necessary in order to get to all the nooks and crannies of India

C ONVERSE D ISTRIBUTION S TRATEGY I NDIA

IN

Corporate Owned Retail Shops Why? Maximization of companys own product and integrity maintenance

Pace setter for other company distribution outlets like.

P ROJECTED P ROFIT & L OSS


Year Unit/Sales No of Stores Net Sales CGS 2013 802,900.00 1.00 802,900.00 434,000.00 2014 860,250.00 6.00 5,161,500.00 2,511,000.00 2015 992,000.00 12.00 11,904,000.00 5,059,200.00

Gross Profit
Other operating expenses Net profit

368,900.00
132,000.00 236,900.00

2,650,500.00
792,000.00 1,858,500.00

6,844,800.00
1,584,000.00 5,260,800.00

C ONCLUSION

Readiness of Converse for expansion Best target Country : India Entry Mode : Corporate Owned Retail Store Marketing Strategy with aggressive promotion Profitability in two years

R ECOMMENDATION

Market Entry to India Aggressive promotion Vertical Integration Strategic alliance Product standardisation

Marketing Communication

Any Questions

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