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Market Performance of Hai Phong Footwear - Essay Example

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The essay "Market Performance of Hai Phong Footwear" focuses on the critical analysis of the major issues in the market performance of Hai Phong Footwear, based in Vietnam, and produces sports shoes, leather shoes, balls, foam rubber, gloves, and women's shoes.
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International Marketing Report Name: Tutor: Course: Date: Executive Summary Hai Phong Footwear Company is based in Vietnam and produces sports shoes, leather shoes, balls, and foam rubber, gloves and women shoes. The company is based in Hai Phong province and manufactures 13 million products annually from 23 production lines and 12 factories and 14,000 workers. Over the last five years, the company has been making steady growth in sales and revenue. After meeting the local demand, it is intending to venture into the international market. Traditional market for most Vietnamese Footwear is US and EU. However, Hai Phong Footwear Ltd has two options; Japan and United Kingdom. The company will enter the Japanese market because its economy is surplus compared to the UK economy at -0.2 percent deficit. Moreover, Japanese consumption patterns for shoes are not only higher than the UK but its culture, sentiment and style is closer to that Vietnam. Geographically, Japan is closer to Vietnam, making it a cheaper target for imports, less shipping costs and import taxes. Although the Japanese government is attempting to protect its local industries, the sentiment and desire for foreign goods among the consumers is unstoppable. Hai Phong Footwear takes advantage of its global reputation, skilled workers, lower production costs and cheap access to suppliers from China. It will also capitalize on the existing trade agreements of more than 20 years. To enter the Japanese market, the company will do a merger with a local manufacturer or distributor to win the Japanese consumers. A merger will also help to create synergy and gain instant access to the impenetrable Japanese shoe market. This report consists of four sections; company and product background, comparative country and product market attractiveness, market selection and opportunity statement, and entry mode strategies. Tables of Contents Executive Summary 2 Tables of Contents 3 List of Figures 5 List of Tables 6 1.0 Introduction 7 1.1 Industry description and Company background 7 Figure 1: Footwear and Leather export revenue of Vietnam (2009-2014 in $billions) 8 Figure 2: Export structure for Vietnam Leather and Footwear in 2014 8 1.1.1 Company objectives and corporate strategies 9 1.1.2 Business strategies to gain market share 9 1.1.3 Company performance 9 Figure 3: Sales performance of Hai Phong Company in the last four years 10 1.1.4 Product and segment satisfaction 10 1.1.5 Target market 10 1.1.6 Product performance 11 1.1.7 Company resources and capabilities to enter overseas markets 11 1.2 Comparative country and product market effectiveness 11 1.2.1 Japan 11 1.2.2 United Kingdom 12 1.2.3 Product Market analysis 13 (Source: www.yanoresearch.com) 13 Figure 4: Market size for shoes and footwear 2002-2013 13 Figure 5: Total shoe imports to Japan between 1987 – 2009 14 1.2.4 Competitor Analysis 15 Table 1: Japanese Footwear competitor analysis 15 1.2.5 Japanese Buyer analysis 16 Table 2: Target market for sports shoes in Japan 17 1.3 Market selection and opportunity statement 18 1.4 Market entry strategies 19 1.5 Recommendations 20 Reference list 22 List of Figures Executive Summary 2 Tables of Contents 3 List of Figures 5 List of Tables 7 1.0 Introduction 8 1.1 Industry description and Company background 8 Figure 1: Footwear and Leather export revenue of Vietnam (2009-2014 in $billions) 9 Figure 2: Export structure for Vietnam Leather and Footwear in 2014 9 1.1.1 Company objectives and corporate strategies 10 1.1.2 Business strategies to gain market share 10 1.1.3 Company performance 10 Figure 3: Sales performance of Hai Phong Company in the last four years 11 1.1.4 Product and segment satisfaction 11 1.1.5 Target market 11 1.1.6 Product performance 12 1.1.7 Company resources and capabilities to enter overseas markets 12 1.2 Comparative country and product market effectiveness 12 1.2.1 Japan 12 1.2.2 United Kingdom 13 1.2.3 Product Market analysis 14 (Source: www.yanoresearch.com) 14 Figure 4: Market size for shoes and footwear 2002-2013 14 Figure 5: Total shoe imports to Japan between 1987 – 2009 15 1.2.4 Competitor Analysis 16 Table 1: Japanese Footwear competitor analysis 16 1.2.5 Japanese Buyer analysis 17 Table 2: Target market for sports shoes in Japan 18 1.3 Market selection and opportunity statement 19 1.4 Market entry strategies 20 1.5 Recommendations 21 Reference list 23 List of Tables Executive Summary 2 Tables of Contents 3 List of Figures 5 List of Tables 7 1.0 Introduction 9 1.1 Industry description and Company background 9 Figure 1: Footwear and Leather export revenue of Vietnam (2009-2014 in $billions) 10 Figure 2: Export structure for Vietnam Leather and Footwear in 2014 10 1.1.1 Company objectives and corporate strategies 11 1.1.2 Business strategies to gain market share 11 1.1.3 Company performance 11 Figure 3: Sales performance of Hai Phong Company in the last four years 12 1.1.4 Product and segment satisfaction 12 1.1.5 Target market 12 1.1.6 Product performance 13 1.1.7 Company resources and capabilities to enter overseas markets 13 1.2 Comparative country and product market effectiveness 13 1.2.1 Japan 13 1.2.2 United Kingdom 14 1.2.3 Product Market analysis 15 (Source: www.yanoresearch.com) 15 Figure 4: Market size for shoes and footwear 2002-2013 15 Figure 5: Total shoe imports to Japan between 1987 – 2009 16 1.2.4 Competitor Analysis 17 Table 1: Japanese Footwear competitor analysis 17 1.2.5 Japanese Buyer analysis 18 Table 2: Target market for sports shoes in Japan 19 1.3 Market selection and opportunity statement 20 1.4 Market entry strategies 21 1.5 Recommendations 22 Reference list 24 1.0 Introduction The aim of this report is to provide a comprehensive understanding of firm and product performance, and entry into foreign markets. This report examines Leather and Footwear industry in Vietnam, specifically Hai Phong Footwear Company which is contemplating on entering United Kingdom or Japan. It makes comparisons of industry environments in both countries and recommends for suitable entry strategies for the company into the chosen country. This report is divided into the following four sections: Section I: Company and product background Section II: Comparative country and product market attractiveness Section III: Market selection and opportunity statement Section IV: Entry mode strategies 1.1 Industry description and Company background Leather Footwear is one of the leading exports of Vietnam to Europe, Greater Asia and America accounting to 4 percent of the exports at $4.8 billion in 2014 (Nguyen, 2014). Vietnam is a country in the Far East with expansive footwear industry after broadcasting equipment manufacture and crude petroleum refining but followed closely by rice exports. With more than 500 leather factories, the industry employs more than 500,000 people (Nguyen, 2009). Enterprises in Vietnam operate under processing contracts with foreign partners who supply designs and materials then undertake finished product marketing (Nguyen, 2014). Sports shoes have the largest share in the exports and production compared to clothes and leather shoes. (Source: www.vietrade.gov.vn) Figure 1: Footwear and Leather export revenue of Vietnam (2009-2014 in $billions) (Source: www.vietrade.gov.vn) Figure 2: Export structure for Vietnam Leather and Footwear in 2014 Hai Phong Footwear Limited is a company established in 1959 that trades and manufactures leather products. It produces 13 million products annually and has 14,000 workers, 23 production lines and 12 factories (Vietnam Business Forum, 2015). The company makes sports shoes, leather shoes, balls, and foam rubber, gloves and women shoes. The key export markets are Taiwan, Japan, America and European Union. 1.1.1 Company objectives and corporate strategies We provide prompt delivery for high-quality products at competitive prices We satisfy our customers by meeting and exceeding their expectations We provide sound leadership and management of employees, social responsibility and production Our company strives for equal treatment, inclusion and good working conditions for employees We intend to increase our market share and expand our market reach to Canada and Australasian countries Our company expects to increase sales revenue through viable market segments and target markets 1.1.2 Business strategies to gain market share Incorporate technology in sporting shoes manufacture to increase production by 30% in 2016 and 2017 Expand market share of shoe exports to EU, Japan and the US in order to increase sales revenue by 10% in 2016 Expand into new markets of United Kingdom or Japan to raise the market share by 5% in shoe exports from Vietnam in the next three years 1.1.3 Company performance Hai Phong Leather Company has been manufacturing sports shoes, leather balls, canvas shoes, and handbags, leather shoes for men and specific purpose leather shoes for more than 50 years. Since 2004, the company renovated its products to be of high quality and reasonable prices. (Source: www.vccnews.com) Figure 3: Sales performance of Hai Phong Company in the last four years From the figure 3 above, the company has been making steady sales performance for the last four years. This growth in sales is due to rising demand for shoes within the Vietnamese market and improvement in consumer expenditure. This demand has also gone alongside the demand for sports equipment, clothing and footwear. 1.1.4 Product and segment satisfaction The product is sports shoes that satisfy the needs of sportsmen and women, and also people who like keeping fit and health through regular exercises (Nguyen, 2009). This segment requires shoes that are of high-quality, tough and reliable. Sports shoes are made to match activities and thus necessary in a world that people have a strong desire to keep fit and healthy. There are also many sporting activities such as soccer, athletics, indoor games and mountain climbing. All these events require high-quality sports shoes. 1.1.5 Target market The target market for sports shoes are two segments; sporting men and women, and people desiring physical fitness. For sporting men and women, this market is college educated and aged 18-35 years. They actively participate in soccer and athletics championships. They earn about $10,000-20,000 per month. They like shopping for sporting equipment and clothes and buy shoes even for their friends and family members. For people desiring physical fitness, they are aged above 40 years and conduct morning and evening jogging to reduce instances of lifestyle diseases. Their annual income is $25,000-35,000 and has university education. They have families and are the key decision makers in household purchases. They like window shopping and searching for information online regarding best quality shoes and their prices. 1.1.6 Product performance Sports shoes constitute 60 percent of the total production followed closely by ladies shoes. However, the production performance only meets the local market demand in Vietnam (Nguyen, 2009). Besides, parts, chemicals and machines are imported from China, Taiwan and South Korea. Sport shoes are integrated in the global value chain owing to increasing population base. In 2014, only one unit was the per capita consumption of footwear. From the shift to premium shoe products, the local consumers are expected to raise their consumption of sports shoes (Nguyen, 2009). 1.1.7 Company resources and capabilities to enter overseas markets First, efficient and effective shoe technology and innovation is required to increased production and quality of shoe products that meet the international standards (Nguyen, 2014). This implies that the company improves on its capacity by importing new tanning machines and modern shoe making technology. Second, better trained and compensated employees with technical and professional skills in sporting shoes will increase the potential of the company to meet international demand (Nguyen, 2009). Third, since most of the company sales met the local market needs, the company has involved standards in environmental sustainability and anti-dumping policies. The company has great brand reputation having been in production for more than half a century and has provided an excellent product mix of leather balls, leather shoes and sports shoes. 1.2 Comparative country and product market effectiveness The target countries for Vietnam sports shoes are Japan and United Kingdom (UK). Japan is in Asia (Far East) while the UK is in the European Union. 1.2.1 Japan Japan is a Pacific Ocean island nation with a population of 127 million people. The country has consumption tax at 8 percent for all imported services and goods at various levels of the supply chain (Previtera & Boyle, 2014). Culturally, the country has been trading for over 500 years with Vietnam for Sandalwood, spices, sugar and silk (Pilling, 2014). The attraction of Vietnam to Japan is culture, sentiment and style with greater multifaceted cooperation in technology, military and agriculture. With a GDP of $4.8 trillion and $33,000 per capita, the economic performance stands at 2.8 percent annual growth making it the third largest economy in the world (Pilling, 2014). Technologically, the country boasts large industrial capacity for processed foods, textiles, chemical substances, motor vehicles, steel and machine tools. The country is a leader in scientific research, biomedical research and machinery. Imports comprise chemicals, textiles, foodstuffs (beef), fossil fuels and machinery and equipment. Moreover, shifts consumption in consumptions shows that 70 percent of consumers are concentrated in Japan, Europe and North America (Previtera & Boyle, 2014). 1.2.2 United Kingdom United Kingdom has population of 64 million people, a $2.5 trillion GDP and a per capita income of $39,000 (UK Government, 2015). The import duty rate is 16.9 percent and 20 percent import VAT for imported shoes and footwear (Wholehouse, 2014). It is the sixth largest importer after US, France, Japan, Germany and China and lags behind many culturally or geographically distant markets. The country has a trade surplus in pharmaceuticals but deficits (-0.2 percent) exist in paper, furniture, footwear and clothing, machinery and spacecraft (Wholehouse, 2014). The UK has low market share for clothing and footwear compared to China, Japan and Russia. Although the UK imports footwear it prefers own brands and exports to Mexico. English as a national language, the country is further away in Europe compared to Japan. Housing costs have risen with 14 million people risking social exclusion and poverty (Khan, 2008). British universities are behind scientific research and development and come third after China and United States. While the population of the UK is growing at 7.9 percent, Japan’s population is declining and is expected to have reduced by 91 million people by 2050 (Ardener, 2007). However, Japan is chosen as a target market for Vietnam sports shoes because it has huge consumer population (127 million) compared to the UK with 64 million people (Khan, 2008). The Japanese economy is also surplus compared to the UK economy at -0.2 percent deficit. Moreover, Japanese consumption patterns for shoes are not only higher than the UK but its culture, sentiment and style is closer to that Vietnam (Wholehouse, 2014). Geographically, Japan is closer to Vietnam, making it a cheaper target for imports, less shipping costs and import taxes. For luxury goods, Japan is one of the leading mass markets. 1.2.3 Product Market analysis Size of the Market: In 2013, the market size in the same year for footwear and shoes was estimated at 1.3 trillion Yen with a 102.3 percent increase over 10 years. Sports shoes was leading at 550 billion Yen at 104.8 percent growth (Euromonitoer, 2014). The size of the market for shoes and footwear for year 2002-2013 is provided in the graph below. (Source: www.yanoresearch.com) Figure 4: Market size for shoes and footwear 2002-2013 Market growth rate: In 2013, Japanese footwear market grew by 1 percent dominated by women’s footwear such as trainers and boots. Expansion of shopping centers, change in lifestyle and growing consumer base are increasing the demand for footwear in Japan. In 2009-2014, the Japanese market for footwear is 1.7 percent and is expected to rise to 1.9 percent during 2015-2019 periods (Euromonitor, 2014). This is attributed to rapid online migration, evolving distribution channels, changing consumer preferences and running boom. However, the overall slow growth in the GDP arose from nuclear disasters, tsunamis and earthquakes. Market segments: The segments in Japanese footwear are athletic and non-athletic footwear. Athletic footwear includes active lifestyle, sports, and athletic footwear while non-athletic footwear comprises children boots, pumps, loafers, dress footwear and casual footwear for men and women (Euromonitor, 2015). Insert shoes have higher market share compared to sports shoes and backpacking boots and hiking shoes. Compared to dress and fashion footwear, casual footwear has the highest market share. The footwear for kids is higher compared to that of women and men. The propensity to spend and changing lifestyle is driving the footwear market for kids. Product lifecycle phase: Sports shoes for both male and female users are in the maturity phase. These items have been influenced by technological advances as stores converge into similar entities and dialectic materialism. Size of imports: Japan imports clothing and footwear mainly from China. Annual demand is 700 million pairs of shoes meaning an average of 5.5 pairs for every Japanese citizen. The size of imports has been increasing compared to locally manufactured shoes. (Source: www.isf-web.jp) Figure 5: Total shoe imports to Japan between 1987 – 2009 Sources of imports: Italy (36%) is the leading exporter of shoes to Japan followed by China (18%), Cambodia (7%) and South Korea (4%). These countries provide low-priced, high-quality footwear with greater volumes (Euromonitor, 2014). Distribution channels: Online sales and retail outlets are the major forms of distribution for sports shoes and other footwear. This implies a B2B transaction through stores and B2C sales online. The retail environment is facing fierce competition, subdued discretionary spending and volatile consumer sentiment. 1.2.4 Competitor Analysis The leather and footwear industry in Japan is not competitive as sector comes under pressure to liberalize imports of leather products. The local players are Asics, Mizuno, Goldwin and Descente. In 2014, the footwear was led by Descente at 21.5% of the athletic shoe and clothing market (Koshikawa, 2014). However, international players have taken over the footwear market in Japan. Adidas Japan KK led in 2013 at 32% market share driven by running boom and continuing jogging. The leader has benefited from football fever and the growing FIFA World Cup as it is the exclusive supplier of the national football team of Japan. Other international players are Puma Corp and Nike Japan Co. Ltd. Table 1: Japanese Footwear competitor analysis Competitor Local/Foreign Strengths Descente Local Fast expanding with the acquisition of INOV-8. Has huge market experience with 30 percent of sales coming from footwear. Surpassed Mizumo in market capitalization after investing in South Korea (2014 sales at $67.5 million). Sales declined by 3 percent in 2014 (Koshikawa, 2014). Most of its customers (40%) are non-Japanese. Plans to open outlets in Nagoya, Osaka and Tokyo under direct management from Tokyo. Sales a mix of clothing and footwear. Adidas Japan KK Foreign Has running contract with Japan Football Association to supply shoes and athletic apparels. Leading player in 2013 sportswear. Recognized as international sportswear brand for running market and football (Euromonitor, 2014). Puma Corp Foreign Recognized fashionable brand that is sports-inspired and popular to women. Developed recyclable and biodegradable shoes and bags. Popular global brand (Euromonitor, 2014). Hai Phong Leather Company will take advantage of poor market segmentation of the above three players. Descente experienced declining sales in 2014 while Adidas and Puma have dominated football shoe and apparel supplies. The market for female outdoor activity and professional athletes remains untapped. This will be the market opportunity for Hai Phong sports shoe products. The sector has low switching but high entry costs for new operators in the market. Although some of the existing players like Adidas Japan KK have established agreements and contracts with customers it is still easy to make profits in the Japanese market. The company will enter the market under pricing strategies since Descente, Adidas, Puma and Asics enjoy pioneer status. Since most of the footwear is manufactured in Vietnam at low cost and high-quality, the company will not set a manufacturing base in Japan but instead establish outlets in Tokyo. The sports shoe products will be positioned as high-quality and low priced shoes for Japanese consumers. First, the company already has adequate equipment, machinery and latest technology in footwear manufacturing. Second, the company has sufficient slack resources to conduct research and development into excellent quality shoes. Third, the company can produce high-quality and low cost products compared to Japanese products. Lastly, it is difficult at the moment to find a low-cost footwear producer that is based in Japan given the premium competitors such as Puma and Adidas Japan KK. 1.2.5 Japanese Buyer analysis Shoppers for shoes in Japan are shifting in behavior to resemble that of shoppers in Europe. They are giving more attention to price, overall outlook and finishing touch (PR Newswire, 2015). Switching costs are low implying that customers can easily switch to a different brand. Japanese buyer behavior has changed significantly due to aging population, shrinking birth rate, changing family values and women occupation in white-collar careers (Huysveld, 2015). Majority of the Japanese consumer population live in cities of Tokyo, Nagoya and Osaka. Japanese love new technologies, new products and new gadgets (PR Newswire, 2015). They are demanding in quality and service hence members of staff should be nearby and in high affluence. Brand orientation shows that they are willing to pay for service expectations and high quality standards at premium prices (Huysveld, 2015). Price sensitivity depends on social status and price range of purchased goods. They are attracted to imported goods because they are not available, imported from famous countries, show social status and enjoy the exotic touch of the country of origin. Most Japanese agree with opinions of their workmates, friends and neighbors but usually purchase for social status and practical use. They are humble people and are not too ‘flashy’. As they go further away from their home shopping malls, the prefer specialty shops instead of department stores (Huysveld, 2015). Japanese are shopping more online. They are among the healthiest people through combination of genetics, diet and lifestyle as they spend more on recreation, sports and health living. Being environmentally conscious, these consumers use natural ingredients that have low environmental impacts, less energy waste and emissions. The target market for sporting shoes will be athletes and active lifestyle consumers are as shown in the table below. Table 2: Target market for sports shoes in Japan Market segmentation variables Athletes Active lifestyle consumers Age 18-35 years Over 40 years Education College University Income Approximately $15,000-25,000 per month Annual income is $130,000-145,000 Marital status Single/Married with one or two children Married/Divorced/Separated with two or three children Occupation Career sports men and women Middle level employees, professionals and business executives Location / residence Suburban areas Inner city Psychographic factors They live in materialistic lifestyles and incur high level of waste. Buy shoes for participation in key economic activities such as participating in rugby, soccer and athletics. Have a lot of disposable income and buys often. Buy and consume in excess of what they need. They are physically fit and athletic. They are sensitive to their lifestyles and cautious of their physical fitness. Regulate intake of high fat foods. Buys shoes for leisure and physical fitness. Prefer mountain climbing, surfing in open beaches and walking on forest nature trails. Prefer window shopping with family members. Have specific preferences and shopping outlets and stores. 1.3 Market selection and opportunity statement Hai Phong Leather Company has chosen to enter the Japanese footwear market for sports shoes. This is because manufacturers in Japan face increased imports from China and Italy. Local manufacturers are not keeping up with reducing prices of industry products. This implies that to produce high-quality and low priced footwear, they must outsource production overseas. Most of the Japanese footwear manufacturers have competitive disadvantages of meeting social status and priced quality footwear. Hai Phong Leather Company will capitalize on well-functioning and efficient online distribution channels to enter and remain competitive Japanese market. The proximity of Vietnam to Japan will reduce on shipping, and clearing and forwarding costs. Moreover, low consumptions and import taxes of Japan encourage Vietnamese exports to the country. The target market of sporting men and women, and people desiring physical fitness has high disposable incomes and trendy lifestyles that are characterized by wasteful consumption and luxurious purchases. This implies that footwear sales will make inroads into this market and make bigger gains. Hai Phong Footwear Company will take the opportunity of existing trade relationships between Vietnam and Japan to enter the market and compete with the vertically integrated firms. The firm prides on cheap labor and reduced tariffs by government to operate. The domestic Japanese market is already flooded with imported shoe products from China and Bangladesh. This is because of high labor requirement and the fall in market share concentration of mid-sized firms in the past five years. Moreover, local manufacturers lack the capacity to counter the high degree of import penetration (Yamamoto, 2004). Being branded as a low cost and high-quality footwear producer, the company will meet the expectation of high-end who prefer high quality and premium products. Lastly, the company has disposable resources, skills and expertise or manpower to meet the growing demand for leather and footwear in Japan. 1.4 Market entry strategies Hai Phong Leather Company will opt for a merger or partnership with some of the potential companies in Japan which understands domestic marketing. This is because the Japanese market discourages foreign competition and will develop strategies to put down the competitors (Correia, 2014). This merger will create synergy in terms of resource mobilization, instant access to customer bases in major Japanese cities and adequate resources and finance. The agreement will be based on geographical regions as the product establishment is already complete. The two firms will share the profits and risks equally. Aggressive pricing strategy will work in this case since the target market is a new geographical market for existing product as the home base market matures. Being a late entrant, Hai Phong Leather Company will rely on new technology and cheap, skilled labor in Vietnam to change the cost equation. The firm will offer better service with lower costs by merging with a local manufacturer. Online distribution and stores will be effective to access the selected market segments such as women, men and children’s sports shoes (Goel, 2015). The aggressive pricing strategy will meet the needs of the sporting segments by taking the advantage of the tendency by incumbents to average prices across the segments. Delivering services and goods to a new target market requires aggressive distribution mechanisms (Arnold, 2003). Exporting or importing goods means that contracts have to be established and managed in a foreign country. The low tariff market of Japan with reduced desire for protection of local industries is an opportunity for Vietnamese goods (Euromonitor, 2015). There are several strategies of firm’s entry into a foreign market; direct exporting, licensing, mergers or acquisitions, and franchising. Direct exporting means direct selling to the chosen market using own resources (Arnold, 2003). Agents or distributors can be used once the sales program is complete in order to represent the company interests. They are handled like any other company staff. Licensing implies transfer of rights for product use to another firm especially where the purchaser has larger market share in the region (Kalyanaram & Gurumurthy, 1998). Franchising works well in firms with repeatable business models but requires strong brand recognition and future competition for the franchisee. Partnerships are a necessity in some regions like Asia where social and business culture is different (Arnold, 2003). It helps being in customers, contacts and local market knowledge. On the other hand, mergers and acquisitions involve creation of a third party that is managed independently. It provides instant access to customer bases and removes the barriers associated with opening own business in a foreign and unfamiliar market (Kalyanaram & Gurumurthy, 1998). It requires significant investment. Kalyanaram and Gurumurthy (1998) argue that the trade-off between alternative entry modes is control and risk. Risk is minimized by undertaking low intensity modes (Arnold, 2003). However, based on consumer behavior, price levels and market share of Japanese Footwear it is not possible to simply export. Most Japanese consumers prefer social status and foreign brands after identifying positively with the country of origin (Euromonitor International, 2014). This means that an international player that understands that Japanese consumer behavior and correct product pricing will make great entry into the entire market. To win on home-made brands, a merger with a local company will be effective. Since Hai Phong footwear is cheaper, they will create price differentials that can necessitate a switch to the alternative product. 1.5 Recommendations 1. The company should target active lifestyle and sports people by providing quality and premium sports shoes. This is one of the most lucrative segments in which the company can gain a sizeable market share. 2. Investment in research and development will be necessary especially in new quality shoes for active lifestyle consumers 3. The management should focus on terms and conditions of the merger with a local Japanese firm that already understands the domestic market 4. Market research into consumer behavior and purchase patterns needs to be conducted in major Japanese cities of Nagoya, Osaka and Tokyo to understand their needs 5. Employees will require training and development to meet new demands in the foreign market 6. The company should comply with the laws and regulations of Japan in terms of taxes, duties and anti-dumping laws 7. New machinery, equipment and technology will be required to meet increased demand in the Japanese market Reference list Ardener, S 2007, Professional identities: policy and practice in business and bureaucracy. New York: Berghahn. Arnold, D 2003, Strategies for entering and developing international markets, Pearson FT Press. http://www.ftpress.com/articles/article.aspx?p=101588&seqNum=2. Correia, DT 2014, Internationalization strategy of SKYPRO shoes to Japan, School of Business and Economics. NOVA. http://run.unl.pt/bitstream/10362/14893/1/Correia_2014.pdf. Euromonitor International, 2014, Apparel and Footwear in Japan, Country Report. http://www.euromonitor.com/apparel-and-footwear-in-japan/report. Euromonitor International, 2015, Sportswear in Japan, http://www.euromonitor.com/sportswear-in-japan/report. Goel, N 2015, Athletic Apparel and Footwear market in Asia Pacific 2019, Ken Research. https://www.linkedin.com/pulse/athletic-apparel-footwear-market-asia-pacific-2019-nitesh-gupta. Huysveld, P 2015, The ultimate survival guide for Business in Japan, lulu.com. http://www.lulu.com/shop/http://www.lulu.com/shop/philippe-huysveld/the-ultimate-survival-guide-for-business-in-japan/ebook/product-22166248.html. Kalyanaram, G & Gurumurthy, R 1998, Market entry strategies: Pioneers versus late arrivals, Strategy and Leadership. Booz & Company Publishers. http://www.strategy- business.com/article/18881?gko=64116. Khan, U 2008, England is most crowded country in Europe, The Daily Telegraph. London. Koshikawa, 2014, Descente trying to adopt Korean business model. Nikkei Asian Review. http://asia.nikkei.com/Business/Companies/Descente-trying-to-adopt-Korean-business-model. Nguyen, TH 2009, Leather and Footwear industry in Vietnam: The labor markets and gender impact of the global economic slowdown on value chains, Government of Vietnam. Nguyen, TH 2014, Vietnam Leather and Footwear industry: Opportunities and challenges on the way of Vietnam entering WTO, LEFASO Vietnam. http://siteresources.worldbank.org/INTRANETTRADE/Resources/WBI-Training/288464- 1139428366112/Session6-NguyenThiTong-Footwear_EN.pdf. Pilling, D 2014, Bending Adversity: Japan and the Art of Survival. London: Allen Lane. PR Newswire, 2015, Footwear Market-Asia Pacific Industry Analysis. http://www.prnewswire.com/news-releases/footwear-market---asia-pacific-industry-analysis-size-share-growth-trends-and-forecast-2014--2020-300126375.html. Previtera, P & Boyle, B 2014, Japan’s consumption tax: Lessons for the United States. Temple University, Japan. http://www.taxanalysts.com/www/freefiles.nsf/Files/PREVITERA-BOYLE-24.pdf/$file/PREVITERA-BOYLE-24.pdf. UK Government, 2014, UK trade performance across markets and sectors, Department of Business Innovation and Skills. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/32475/12-579-uk-trade-performance-markets-and-sectors.pdf. Vietnam Business Forum, 2015, Vietnam Exporter Directory: Company information, Vietnam Chamber of Commerce and Industry. http://vccinews.com/exporter_cat.asp?id=294&cate_id=24&txtSearch=. Wholehouse, M 2014, UK has fastest-growing economy, International Monetary Fund. The Telegraph. London. World Footwear, 2015, Footwear exports continue to grow in Vietnam. http://www.worldfootwear.com/news.asp?id=680&Footwear_exports_continue_to_gr ow_in_Vietnam. Yamamoto, S 2004, Decline of the footwear industry in Japan and the United States as a result of the global shift in production. Graduate school. Tochoku University. http://ir.library.tohoku.ac.jp/re/bitstream/10097/45264/1/AA0045945004888.pdf. www.brasemb.or.jp/portugues/economy/pdf/moda.pdf www.italtrade.com/countries/asia/vietnam/CON5_TONG_PRES_EN.pdf Read More
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he diagram above clearly displays the scenario of all the three segments for the year 2015 in the North American footwear market.... o assess the competitive strategy of Black Bottoms in the years 10-15, there is a requirement to analyze the ‘Competitive Intelligence Reports' (CIR), which will provide a comprehensive understanding of the company's market scenario.... The diagram provided below illustrates that the price, S/Q Rating, Models Offered, Free Shipping, Advertising, Celebrity Appeal, Online Orders, Pairs Sold and market Share for Black Bottoms....
14 Pages (3500 words) Essay

Business Simulation Game - Performance of a Footwear Company

The paper 'Business Simulation Game - performance of a Footwear Company' is a perfect example of a management report.... This is my final report on the performance of a footwear company for the last 5 years that my colleagues and I were assigned while it was in its 10th year.... The paper 'Business Simulation Game - performance of a Footwear Company' is a perfect example of a management report.... This is my final report on the performance of a footwear company for the last 5 years that my colleagues and I were assigned while it was in its 10th year....
12 Pages (3000 words) Report

Managing Strategy - Footwear Industry

The paper 'Managing Strategy - footwear Industry" is a great example of a management case study.... The paper 'Managing Strategy - footwear Industry" is a great example of a management case study.... The report illustrates the strategies employed and how they were employed to achieve our main mission of providing the best quality footwear at competitive prices.... It is very fundamental, especially for new companies, to carry out a thorough market research, to enable them make good choices....
19 Pages (4750 words) Case Study

Direct Marketing project for Nike Inc

The company's most famous brand is the sports footwear.... states that social media platforms are emerging as ideal avenues in which companies like Nike can directly market their products as well as create a relationship with their consumers.... The use of these methods must entail the consideration of the target market, the offer strategies, and that the company seeks to infiltrate....
14 Pages (3500 words) Case Study

Nike Inc Five Year Plan Market Extension Plan

is the largest seller of athletic footwear, apparel, gear, and accessories.... Nike indulges in sports of all kind, whatever sports a person watches, he is sure to see the Nike logo on the sports apparel and footwear.... The paper analyses the previous Nike Inc market activity and helps to understand the various internal and external factors of the company that are considered as strengths and weaknesses and also defines many other factors that may serve as opportunities or threats to the company....
15 Pages (3750 words) Business Plan

Legal and Strategic Management of Adidas and Under Armour in Operation

he combined sales output acquired from apparel and footwear fell to 28% from the previous year to 1.... Adidas did not take liability for claims despite their ground legality that usually arose from connectivity with delays or infringement of information non-performance duties, the infringement of the industrial property rights, positivity in violation of the contractual duties or third parties not only if Adidas committed such infringements by gross negligence or even willfully, but even if Adidas infringes contractual obligations by negligence that can be even so slight....
8 Pages (2000 words) Case Study
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