Do Stores Really Need to Open on Thanksgiving?

The holidays are starting and retailers are busy. Many people are asking “Do stores really need to be open on Thanksgiving?” Let’s face it: the promotional competition for black Friday sales will be fierce (Forbes). Retailers are getting desperate to attract customers during the holidays (Forbes). So, should retailers be opening on thanksgiving? Is this fair to the people that have to work this day? Does the retailer financially benefit from being open on a holiday?

According to an article in the Sun Sentinal, Gary Stein, “There must be a market for it, because stores wouldn’t open if they didn’t make money. As for the employees who have to work on Thanksgiving, they probably get time with their family before going to work. And many will get holiday pay. Most employees will be thankful just to have a job, holiday or not”. That, I would never agree with this. I do believe people would be thankful that they have a job. Most employees who work retail give up nights and weekends to keep the business running. Most retailers use to be closed 3 holidays out of the year. Two of these holidays are regligous. I honestly don’t believe that one day will cost retailer millions. This will then give employees a full day to enjoy the day with their families.

Meanwhile, let’s consider the pros and cons of a stores staying opening on Thanksgiving. According to Money Tips the pros include: more earlier sales, competitive advantage. Yes, they do benefit from the extra sales and a jump start to the holiday shopping. These do appeal to the bargain hunters. As for the cons which include: Employees unrested, sales are fatigue, bad press/imagine problems (moneytips.com). Most retailers need to keep in mind the earlier they open the more likely the employees are not in a good mood to be there. In return, it can bring bad customer service. Sales can get over whelming for customer. Customers may become confused and missed the best sales deciding that a different retailer provides a better experience (moneytips.com).

Over the last three years there has been a lot of surveys and petitions sign to keep stores closed on thanksgiving. In 2015, many retailers like REI decided to close thanksgiving. Target and JCPennys, Macy, and Best Buy all plan to open on thanksgiving (Change.org). As for Cherry Hill Mall, which I currently work in, decided to do something different. They opened at 6pm to Midnight on Thanksgiving, it wasn’t mandatory to be open. Disney took a different approached we opened at 8 and closed at 12.

So do retailer benefit from opening? “Ultimately, if you look over the course of the holiday selling season, the fact the stores are opening on Thanksgiving as opposed to Black Friday doesn’t lead to increased sales,” says Howard Feller, a Partner at MMG Advisors, an investment bank specializing in retail and fashion( CNN Money). If anything, opening earlier and earlier has reinforced to consumers that they might get better deals if they wait, Feller says. Promotions no longer feel exclusive (CNN Money). I do think that giving us the employee time off will benefit the retailer more. I was well rested and was able to give the best customer service.

Work citied

  1. Sun Sentinal, Gary Stein, Sunday Dec 6 2014, “Should stores be open thanksgiving”
  2. “Pros and Cons: Should Retailers Stay Open Thanksgiving?” Moneytips.com, 05 Nov. 2015. Web. 07 Dec. 2015.
  3. Loeb, Walter. “Do Stores Really Need Open on Thanksgiving Day?” Forbes. Forbes Magazine, 06 Nov. 2015. Web. 07 Dec. 2015.

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Tiffany & Co company history

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 Tiffany & Co

Has long been renowned for its luxury goods, especially jewelry, and has sought to market itself as an arbiter of taste and style. Tiffany designs manufacture and sells jewelry, watches, and crystal glassware. It also sells other timepieces, sterling silverware, china, stationery, fragrances, and accessories. Many of these products are sold under the Tiffany name, at Tiffany stores throughout the world as well as through direct-mail, corporate merchandising, and the Tiffany Web site. The company branched out in the early years of the new millennium, opening retail locations under the Temple St. Clair and Iridesse monikers. It also acquired a majority stake in Little Switzerland, a duty-free specialty retailer found in the Caribbean, Alaska, and Florida.

Early History

In 1837 Charles Lewis Tiffany and John F. Young opened Tiffany & Young, with $1,000 in backing from Tiffany’s father. Located on Broadway opposite Manhattan’s City Hall Park, this store sold stationery and a variety of “fancy goods,” including costume jewelry. Unlike other stores of the time, Tiffany featured plainly marked prices that were strictly adhered to, sparing the customer the usual practice of haggling with the proprietor. Tiffany also departed from the norm by insisting on cash payment rather than extending credit or accepting barter. In 1841 Tiffany and Young took on another partner, J. L. Ellis, and the store became Tiffany, Young & Ellis. By 1845 the store was successful enough to discontinue paste (costume jewelry) and begin selling real jewelry, as well as the city’s most complete line of stationery. Silverware was added in 1847. In addition to these main items, Tiffany’s also sold watches and clocks, a variety of ornaments and bronzes, perfumes, preparations for the skin and hair, dinner sets, cuspidors, moccasins, belts, and numerous other sundries, including Chinese bric-a-brac and horse and dog whips.

The new partner’s capital enabled Young to go to Paris as a buyer, and he later established a branch store there. When the French monarchy was overthrown in 1848, Young purchased some of the crown jewels and also a bejeweled corset reputed to belong to Marie Antoinette. A shrewd publicist, Tiffany was quick to exploit this coup. He teamed up with P. T. Barnum, to their mutual profit, on a number of ventures and presented a gem-studded miniature silver-filigree horse and carriage as a wedding present to Tom Thumb and his bride. He introduced sterling silver to the United States in 1852, a year after contracting John C. Moore to produce silverware exclusively for the company. In 1853 he bought out his partners, and the firm became Tiffany & Co.

During the Civil War, the company was an emporium for military supplies, producing swords and importing rifles and ammunition. During the Gilded Age that followed, its main problem was finding enough jewelry to satisfy overwhelming customer demand. By then it also had established dominance in the American silverware market. In 1868 a London branch store was added and Tiffany & Co. was incorporated, with its proprietor as president and treasurer. Also in that year, Moore’s workshop became part of the firm. The store, which had been inching uptown with the city itself, moved into a newly constructed, company-owned building adjoining Union Square in 1870. Tiffany’s prestige reached a new level when the company won the gold medal for jewelry and a grand prize for silverware at the Paris Exposition in 1878. Soon it was serving as a jeweler, goldsmith, and silversmith to most of the crowned heads of Europe. Its real clientele, however, came from the burgeoning ranks of America’s wealthy, many with far more cash than taste. Tiffany accommodated them all, no matter how ostentatious or whimsical their desires. The height (or depth) of vulgarity was reached when Diamond Jim Brady ordered, and Tiffany duly produced, a solid gold chamber pot for Lillian Russell, with an eye peering up in the center of the bottom. It was estimated in 1887 that Tiffany’s vaults held $40 million in precious stones. Among these was the largest flawless and perfectly colored canary diamond ever mined. This 128.5-carat “Tiffany Diamond,” still held by the New York store, has been valued by the company at $22 million.

In 1894 a factory was established in New Jersey in Forest Hill, which was later annexed by Newark, for the manufacture of silverware, stationery, and leather goods. Charles Tiffany died in 1902, leaving an estate estimated at $35 million. He was the only Tiffany to run the company. Louis Comfort Tiffany, his eldest son to survive childhood, was an accomplished artist who sometimes made jewelry for Tiffany but was best known for his Art Nouveau stained glass windows and lamps. In 1905 the store had moved into quarters at Fifth Avenue and 37th Street designed by Stanford White in the form of a Venetian palazzo, and two years later John C. Moore, great-grandson of the silversmith, became president. Tiffany’s sales volume rose from $7 million in 1914 to $17.7 million in 1919. This figure was seldom if ever matched during the 1920s, but profits remained high and dividends rose steadily. A share of stock bought in 1913 for $600 was worth the same in 1929, but split five-for-one in 1920 and also earned close to $10,000 in dividends over that period.

Overcoming the Depression

Even the rich cut back on luxury goods after the 1929 stock market crash. Tiffany’s sales fell 45 percent to $8.4 million in 1930, dropped another 37 percent to $5.4 million in 1931, and yet another 45 percent to a rock bottom $2.9 million in 1932 when the federal government imposed an additional 10 percent on the excise tax for jewelry. There were staff layoffs in 1933, 1934, 1935, 1938, and 1939. The company lost about $1 million a year throughout the decade, but, dipping into its capital reserve, never stopped paying a dividend, although it fell to $5 a share in 1940. In that year $3.6 million had to be taken from the reserve just to stay in business, and the London store was closed. Also in 1940, Tiffany moved uptown for the sixth and last time, to the southeast corner of Fifth Avenue and 57th Street, where it put up a $2.5 million Art Deco seven-story building. It was the first completely air-conditioned building in New York. Louis de B. Moore succeeded his father as president in that year. During World War II the Newark factory (which made surgical instruments during World War I) was chiefly given over to military production. It made precision parts for anti-aircraft guns (which it made again during the Korean War) and fitting blocks for airplanes.

Tiffany’s fortunes revived somewhat in this period, but in 1949 earnings came to only $19,368. Net profits were a mere $14,787 in 1952, when the Paris store was closed, and $24,906 in 1953. The company’s $7 million in 1955 sales was no more than it had taken in during 1914. Conservative management and outdated styles were blamed by restive shareholders. One of these was Harry Maidman, a realtor attracted mainly by Tiffany’s long-term lease to the land under its prime-location building. He quietly bought up at least 30 percent of the stock. Denied a seat on the board of directors, Maidman sold his shares in 1955 to the Bulova Watch Co. To prevent Bulova from taking control, Tiffany heirs and close associates sold Hoving Corp., owner of neighboring Bonwit Teller, 51 percent of the stock for $3.8 million. Walter Hoving, who soon became chairman and chief executive officer of Tiffany, had to report to the General Shoe Corp. (later Genesco, Inc.), which took a majority share of his own company in 1956. He did not win firm control of the store until 1961 when he assembled a group of investors that bought out Genesco and Bulova. Nevertheless, Hoving immediately put his stamp on Tiffany by conducting the first bargain sale in the firm’s history to clear out merchandise he considered gaudy or vulgar. He dropped diamond rings for men for that reason and discontinued leather goods, antiques, silver plate, brass, and pewter as not worthy of Tiffany’s attention.

1960-70: Focusing on “Aesthetics”

Hoving recruited a galaxy of stars to create a new standard of quality for Tiffany’s products. Jean Schlumberger was hired to design its finest and most expensive jewelry. Henry Platt expanded the jewelry workshop’s staff from eight to sixty and later enlisted Elsa Peretti, Angela Cummings, and Paloma Picasso to create jewelry exclusively for Tiffany. Van Day Treux, the new design director, revived vermeil (gold-plated sterling silver) and old patterns of silver flatware and commissioned new china. Gene Moore, put to work dressing the store’s windows, spent nearly 40 years creating striking and often provocative displays. “Aesthetics,” Hoving pronounced, “if properly understood, will almost always increase sales.” To broaden the base of its clientele, the store added high-quality but lower-priced goods such as silver key rings for $3.50. By the early 1960s, a third of the store’s patrons were living 100 miles or more away. One of the firm’s many longtime sales clerks said, “It’s gotten so there are customers here whose names I don’t even know.” A San Francisco store was added in 1963, and branches in Chicago, Houston, Beverly Hills, and Atlanta soon followed.

The balance sheet reflected Tiffany’s turnaround. Annual sales reached $21.9 million in the fiscal year 1966 (ending January 31, 1967). Net profits rose every year, from $173,612 in 1955 to $1.7 million in 1966. That year about 65 percent of Tiffany’s volume came from jewelry, 18 percent from silver, 14 percent from china and glassware, and the remaining 3 percent from stationery (engraved, not printed) and specialty items. The company made all its diamond jewelry and a small part of its gold jewelry in the Fifth Avenue store itself. Virtually all of it was designed by the staff. Nearly all of its sterling silver (carried by 150 franchised dealers as well as Tiffany stores) also was staff-designed, and 85 percent was being manufactured in the Newark plant. China and glassware were being made to company specifications. Tiffany’s catalog (free until 1972) was the first major catalog entirely in color.

New Ownership: 1970-89

Business continued to grow in the 1970s. Sales increased from $23 million in 1970 to $35.2 million in 1974. Net income passed the $1 million mark in 1972 and reached $2.1 million the following year. In November 1978 Tiffany & Co. was sold to Avon Products Inc., the world’s leading manufacturer and distributor of cosmetics and costume jewelry, for about $104 million in stock. Tiffany’s sales had reached $60.2 million and net profits about $4 million in the previous fiscal year. Hoving remained chairman and chief executive officer until the end of 1980 when he retired. Avon spent $53 million (raising some of it by selling some of its inventory of uncut diamonds) to open Tiffany stores in Dallas and Kansas City, expand its direct mail orders, introduce Tiffany credit cards, and streamline and computerize its back-office operations. But its ratio of operating profits to revenue fell from 17.6 percent to 6.5 percent between 1979 and 1983, mainly because it tried to compete with department stores in selling low-margin watches, china, and glassware. A 1984 Newsweek article noted that the Fifth Avenue store had stocked so many inexpensive items that it began looking like Macy’s during a white sale and that customers had complained about declining quality and service. In August 1984 Avon agreed to sell Tiffany to an investor group led by its chairman, William R. Chaney, for $135.5 million in cash. The company had earned only $984,000 in 1983 on sales of $124.2 million.

Under its new management, Tiffany & Co. shifted direction again. It sought to reassure the affluent but socially insecure patron that Tiffany’s taste remained “safe.” The firm also cut costs by closing the Newark plant and its Kansas City store, cutting staff, and embarking on a program to wholesale its jewelry and silverware and the line of leather products that had been restored under Avon’s management. Tiffany lost $5.1 million in 1984 and $2.6 million in 1985, mainly because of heavy interest costs on borrowing to pay off Avon, but in 1986 it earned $6.7 million on net sales of $182.5 million, despite paying out $9.1 million for interest on its debt. During 1987 it earned $16.8 million on net sales of $230.5 million. Tiffany went public again in 1987, raising about $103.5 million by selling 4.5 million shares of common stock. About $43 million of this sum was earmarked to retire nearly all of the company’s outstanding debt. The newly public company no longer owned the Fifth Avenue building nor the land beneath it, which it had purchased for $2.8 million in 1963. (The air rights over the building had been sold in 1979 to Donald Trump, owner of neighboring Trump Tower, for $5 million.)

“Tiffany,” a fragrance, was introduced in 1987 at $220 an ounce and marketed by department stores across the country. Wool and silk scarves were introduced the same year, shortly after neckties had been added, and the company’s line of handbags, evening purses, wallets, and briefcases expanded. A London store was reintroduced in 1986 and stores in Munich and Zurich opened in 1987 and 1988, respectively. Emphasizing its glitter in 1988, Tiffany displayed, in five of its stores, a collection of 22 individual pieces of jewelry made in its own workshop and valued at more than $10 million. All but one piece sold. Paradoxically, perhaps, but profitably, Tiffany’s emphasis on luxury drew in the masses; as many as 25,000 people visited the store on a Saturday during the holiday season.

1990 and Beyond

Tiffany’s catalog mailings reached 15 million in 1994. These publications were seen as powerful sales and image tools for the stores as well as a source of profit in themselves. The company’s direct-marketing effort also included business-to-business sales, which included a corporate gift catalog each year. Corporate customers purchased Tiffany products for business gift-giving, employee service, and achievement recognition awards, customer incentives, and other purposes. The Far East played an important role in Tiffany’s resurgence. Mitsukoshi Ltd., the “Bloomingdale’s of Japan,” which began stocking Tiffany items in its department stores and smaller shops in 1972, accounted for $26.5 million of Tiffany’s $290 million in sales in 1988. Mitsukoshi bought 10 percent of Tiffany’s stock in 1989 to increase its earlier 3 percent stake; it eventually sold its stake in 1999. Tiffany opened two stores in Hong Kong during 1988 and 1989, a third in Taiwan in 1990, and a fourth in Singapore in 1991.

Tiffany suffered a serious setback in 1992 when sales to Mitsukoshi fell 35 percent, from an estimated $113 million in 1991. Hurt by a recession, Japanese consumers had cut back spending, catching the retailer with more inventory than it needed. In 1993 Tiffany assumed direct responsibility for sales, merchandising, and marketing at Mitsukoshi’s 29 Tiffany boutiques, taking a $32.7 million after-tax charge to buy them and run them on its own. This restructuring was largely responsible for a $10.2 million loss in 1993 despite sales of $566.5 million, a 16 percent gain. In spite of the setback, Tiffany ranked sixth out of 28 public specialty retailers in return on equity from 1989 to 1993, averaging an annual 18.8 percent over this period. Also in 1992 the company, affected by curbed spending during the 1990-91 recession in the United States, again began to emphasize mass merchandising. A new information campaign stressed that the average Tiffany purchase was under $200 and that diamond engagement rings started at only $850. It sent “How to Buy a Diamond” brochures to 40,000 people who called a toll-free number. To keep the company from losing its cachet, however, it continued to maintain its high-style image through books on Tiffany objects and in-store table setting displays. Avoiding calling Tiffany a luxury-goods firm, Chaney described it as “a design-led business offering quality products at competitive prices.”

During fiscal 1994 Tiffany’s net sales rose to $682.8 million, of which U.S. retail accounted for 45 percent, international retail 41 percent (up from 32 percent two years earlier), and direct marketing 14 percent. (Despite this breakdown, “retail” also included wholesale sales.) Net income rebounded to $29.3 million. Long-term debt was $101.5 million at the end of 1994. In mid-1995 Tiffany was leasing 18 retail stores in the United States and was completing two more, in Short Hills, New Jersey, and Chevy Chase, Maryland. Another 11 were abroad. Tiffany was also operating Faraone stores in Milan and Florence, many boutiques in Japanese stores, and one in Taiwan. Other parties operated four Tiffany boutiques in South Korea and one each in the Philippines, Abu Dhabi, Taiwan, Hong Kong, Hawaii, and Guam. Four Faraone boutiques were in Japanese department stores. Of merchandise offered for sale by Tiffany in fiscal 1994, 26 percent was produced by the company itself. Finished jewelry was produced in Tiffany’s own workshop and also purchased from more than 100 manufacturers. The company acquired Howard H. Sweet & Son, Inc., a manufacturer of gold and silver jewelry and chains in fiscal 1989, and McTeigue & Co., a manufacturer of gold jewelry, in fiscal 1990. Cut and polished diamonds were being purchased from a number of sources. Diamond jewelry accounted for about 22 percent of Tiffany’s net sales in fiscal 1994.

A single manufacturer produced Tiffany’s silver flatware patterns from Tiffany’s proprietary dies by use of its traditional manufacturing techniques. Likewise, engraved stationery was being purchased from a single manufacturer. A Paris workshop decorating hand-painted tableware was acquired in fiscal 1991. In the same year, Tiffany established a watch assembly, engineering, and testing operation in Lussy-sur-Morges, Switzerland. The following year the company acquired Judel Glassware Co., Inc., producer of crystal glassware in Salem, West Virginia. A distribution facility was being leased in Parsippany, New Jersey, and additional warehouse space in adjacent Pine Brook, New Jersey. During the late 1990s, Tiffany focused on boosting its profits by offering fine diamond jewelry. Realizing that its vertically integrated structure bode well for profits, the company purchased a 14.9 percent stake in Aber Resources in 1999. The Canadian firm owned part of the Diavik Diamond Project, a Canadian mine that began producing gem-quality diamonds in 2002. The company sold its stake in Aber in 2004 after it secured a diamond supply contract that extended into 2013.

Tiffany entered the new millennium on solid ground. Overall, the company’s earnings had risen at 24 percent compound annual growth rate from 1996 to 2001. To keep its momentum, Tiffany launched an aggressive growth strategy. By increasing its store count, Tiffany hoped to cash in on middle-income shoppers. An April 2002 Forbes article described the scene at a suburban Tiffany store. “Shoppers clutching Gap and Benneton bags clogged the aisles and elbowed one another to get to the store’s self-service corner, where boxes of sterling-silver key rings, pendants and charm bracelets, many priced under $100, were stacked and prepackaged in Tiffany’s trademark robin’s-egg blue. For customers needing service, staffers roved the sales floor passing out beepers.” Analysts warned that this strategy could possibly tarnish the prestigious brand. Nevertheless, Tiffany’s management anticipated that offering and promoting lower-priced merchandise would lure new customers and spark growth at its retail locations.

The company moved into the Caribbean market in 2001 when it acquired a 45 percent stake in Little Switzerland, a duty-free retailer based in the U.S. Virgin Islands. It increased its stake to 98 percent the following year. In 2003, Tiffany launched a new retail concept under the name Temple St. Clair. Two stores, one in California and one in New Jersey, were opened that year and sold trendy jewelry ranging from $500 to $35,000 per piece. In 2004, the company launched another retail concept, this time focusing on pearls. Named Iridesse, the new stores carried merchandise ranging from $50 to $50,000. In 2004, the company opened ten stores and boutiques: four in the U.S., three in Japan, one in Taipei, one in Shanghai, and one in London. It also launched several new jewelry lines including Atlas, Voile, and Rose. That year, sales increased to $2.2 billion while net income climbed to $304.3 million. In early 2006, the company ended its stockholder rights plan, more commonly known as a poison pill plan that prevented hostile takeovers. The action prompted speculation that the company could possibly go up for sale in the near future.

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Business & successful

I have been set a business studies assignment to set up a new retail business in my area. I already know that similar shops already exist and that I will have competition. I hope that my business will be successful and that there will be room in the market for my new shop. My new retail business is going to be a sports equipment shop. It will only stock sports equipment like cricket bats and hockey sticks. It will no have things such as sports apparel and other clothes. The new shop will be located in the middle of a town (Ramsgate) and be open all year round.

I got my sources of knowledge from producing questionnaires. I gave the questionnaires to a cross section of society. I gathered all the questionnaires and compiled the results to produces different tables and graphs. The Internet helped me in finding out where different competitors were and what there prices are. Also it helped me to find what a suitable location would be to set up the new business. My Business Studies GCSE 2nd edition textbook, by Alain Anderton, helped me to find out different information like constraints on the market etc.

I think that one constraint I will occur on my business is that the cost of house prices may go up so buying or renting a shop may be more expensive than at first I had imagined. The only problem i have occurred is that my business will have to be confined to Thanet. I think that my business should be a sole trader business. This means that it is only run by a single person (me) who has unlimited liability. Being a sole owner has many more advantages than disadvantages. The advantages of a sole ownership are: It is easy to set up and also it is easy to run. Tax advantages, a sole trader is taxed in a different way to other types of business.

Control, the owner is in sole charge and so can make whatever changes are necessary as the business operates over time. Capital, a business nearly always needs some capital to start trading. Profits, all the profits of the business are kept by the sole trader. They don’t have to be split up amongst several or perhaps even millions of other owners or shareholders. This means that there is a link between effort, success and money earned. The harder the sole trader works and the more successful the business the more can be earned. Privacy, only the inland revenue and customers and excise need to know how well a sole trader is doing financially.

The business doesn’t have to publish any information, which could be seen by the general public or other businesses. Labour relations, the larger a work organisation, the bigger the scope for misunderstanding and problems. Many sole traders work on their own. However sometimes business work in small teams so the relations between the workers and the employer are likely to be good. Flexibility, many sole traders have some choice about when they work. The disadvantages are: Unlimited liability, this is a legal obligation on the owners of a business to settle (pay off) all debts of the business.

In law, there is no distinction between the assets and debts of the business and the personal assets and debts of the owner. Lack of continuity, there is no guarantee that the business will survive when the owner wants to stop running it. They might be able to sell it to someone else. They might pass the business along down the family. However the business could simply stop trading and all its assets. Illness, if the owner were to have a long illness, then they might be forced to shut the business. The income and profits would then stop. Long hours, many sole traders work very long hours to keep their business afloat.

People may decide to work different days of the week to keep business going e. g. open on Sundays. Difficulty of raising capital, some people have the money already to start up a business. They might have some redundancy money, for instance. Most small businesses, though, find it difficult to get suitable start up capital. They also find it difficult to get money to expand their business. Limited specialisation, one person being many things like a lorry driver, a building labourer, an accountant, a receptionist and a secretary amongst other jobs. A larger business however could afford to buy in specialist workers.

A supermarket employs shelf stackers, accountants and lawyers so some sole traders may find that the costs are higher than those of a larger business because they can’t gain the advantages of the division of labour. Limited economies of scale. Say the sole trader hires out lorries by the day. A large construction company would own its lorries because this is cheaper if they are kept in use all the time. But the sole trader may only need lorries some of the time. This is an example of economies of scale. In general the larger the business the more scope there is to reduce costs per unit produced.

Sole traders are nearly always small businesses. So they often don’t have the cost advantages that large businesses enjoy because of large-scale production. Orange wants to reach a large number of consumers and it has a large advertising budget. It can afford to advertise on television – an expensive medium. But it also uses magazines, newspapers and billboards. Its advertising slogan, “The future’s bright, the future’s Orange”, is designed to encourage consumers to want to use a mobile phone, a technology still of the future for most people.

But it also implies that Orange, rather than any of the rival networks like Cellnet or Vodafone, is the network of the future. If Orange wanted to recruit an accountant, however, it would be very wasteful to use television. The style of the advertisement would also be different from one selling a phone. It could use a jobs section in a quality newspaper like the Financial Tomes or The Sunday Times. Alternatively, it could advertise in a more specialist trade journal like Accountancy Age, a small business wouldn’t be able to afford television or a national newspaper.

It would want to focus its advertising, using media which was affordable and which reached its target customers. Businesses in Thanet are very different to those in Canterbury. Canterbury is a city whereas Thanet is a district. Canterbury attracts thousands of tourists each year to its old medieval city and Cathedral. Thanet also has its fair share of tourists but no where near as much as Canterbury. Canterbury is overall a more expensive area with its average house price of i?? 128,912 where Thanet’s average house price is i?? 92,812.

My new retail shop is going to be only sports equipment not designer clothes etc. E. g. Slazenger cricket bats and Wilson tennis rackets NOT Adidas tracksuit bottoms or Nike winter coats. There is no other shops in the area which specify in just sporting equipment. There are a few shops in the high street like First Sport and Warreners who have very limited sporting equipment but specify more in designer clothes e. g. Adidas tracksuit bottoms. I feel that I will have no competition in the area as there is nothing like my business retail anywhere else.

My business retail will have sporting equipment for both men and women and also for children. As my business will be located in Ramsgate I will have to think about the different pricing policies. This is because Ramsgate (in Thanet) is a generally poorer place than Canterbury so I will have to think about lower prices for my products. Although Sports Mania is in Canterbury it still has low prices on its products. Sports Mania’s aim is to sell more products for a cheaper price than selling and average amount of products for a more expensive price. This is the method that I plan to use.

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The Secret Recipe of the Body Shop

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The Body Shop is the 2nd largest cosmetics franchise in the world; their stores are everywhere throughout the world – 2400 stores in 61 countries. Its brand name is something but simply, and represents the shop that sells all the goods for body, beauty, and healthcare from top to toe. Its logo is unique and also defines its simplicity, with the green color that describes nature – clearly indicates that the company is environmental friendly. Finally, you will notice that The Body Shop anywhere in the world will not ignore its famous, green, and white logo; and those two colors will be pretty, dominant in any Body Shop outlet that you visit.

The Body Shop’s products are naturally made and against animal testing. There’s something special with the packaging – First of all, the tubes and bottles are recyclable, made by minimum 30% of plastics. The company is trying to reduce of using plastic for higher level recycled content every day. Body Shop also likes to recycled things and made it into accessories. So, aside from being useful and unique, it’s highly eco-friendly.

The entrepreneurs of Body Shop, Anita Roddick, succeeded not because of a capitalist goal which is profit, but she thought of ways to survive in the market. The body shop always born with new ideas and innovations, and they keep improving customer services.

Here, we are going to describe more about The Body Shop and its secret recipe to succeed in franchising world.

Franchising

Anita Roddick appointing a head franchisee in each major national market to be able to concentrate on the development on new product lines and the company’s global vision, rather than the complexities of administration or personnel management. Body Shop has their secret ingredient of selecting its franchisee; that is openly acknowledged a preference for women as franchisees.

Roddick kept strict control over the franchising process, she was really careful with this franchising thing. Her objective was to ensure that The Body Shop image and the principles it was based on, were not diluted through franchising.

Team Management

“We were searching for employees, but people turned up instead” – Anita Roddick

Body shop selects staffs that support the company’s vision, and the employees aren’t kept in the dark – they are supported in the belief that they are part of an exciting future.

The value of integrity defines its interaction with its customers, staff and suppliers. The teams are managed to build their passion through a fun and simple atmosphere within the firm. The employees are knowledgeable and fully committed to the company’s goals.

The trustees of Body Shop look for projects which are committed to addressing social and economic injustice, access to education and protection of the environment and animal life, taking into consideration current global issues and situations.

The directors and the employees can build a good correlation. These executive directors are the people who develop their company’s performance plans. The plans are signed by the employees and then passed on to the management for approval. They make sure that company performance plans are complete and adequate before signing the forms. Executive directors also discuss the company performance plans with the employees in a clear and organised manner. Non-executive directors document their company’s performance and provide feedback to the executive directors from time to time throughout the company performance cycle.

Furthermore, the company is maintaining good relations and open communications with its investors. As a matter of fact, shareholders are regularly invited by the corporation whenever there are gatherings to discuss trade updates. Moreover, whenever there is an annual general meeting, investors get the chance to meet The Board members themselves. And of course, for private investors, they can also access the company’s website for various shareholder services.

Undoubtedly, the company has good consideration for all of its stakeholders; past, present and future. It seems to be a very well planned framework in the firm’s corporate division. It has good policies and procedures with regards to financial matters and operational concerns. Its procedure of assessing the different kinds of situations that come up is certainly a good move on their part. Not to mention, they have maintained good relations with their stakeholders.

Training

The Body Shop management trainee program provides autonomy, a challenge and gives the opportunity to run our own store. The trainee will spend the first year in one of their top performing stores as an assistant store manager and in the second year the trainee will manage their own store. During the program, the trainee will also spend time with The Body Shop Commercial team, get involved in project work at head office and gain an insight into what The Community Trade team does. Beyond the program, there are number of opportunities available from managing a store internationally to moving into a commercial role. The company will support their trainee with training, on the job learning, progress reviews and support from senior management.

Operation

According to the Body Shop Retail Sales report, the total sales worldwide boosted by 7% to �772 million (Body Shop International. With the growing market capacities of the Far East Asian region, international brands like Body Shop will definitely create big. It is reported that Body Shop stores in the Asia Pacific region, particularly in Southeast Asia, Hong Kong and Taiwan, increase its sales by 12% while operating profits to �19.7 million.

In 2002, The Body Shop shoppers do not just go to its chains just to buy its products, because the Body Shop products themselves are the ones that go to the American homes. Surprisingly, the results are promising. It has predicted a 35% profit in operations.

In operating process, body shop always born with new ideas and innovations of their product. Definitely, innovations are proven to increase business’ performance and existence.

The special thing about body shop operation is not just in the manufacturing, but also the services that the company offers. Body shop is campaign for social justice and human rights; they fund the organizations environmental campaign.

Marketing

Products

The company “body shop” sells organically grown body products, for the consumer who likes to take care of him or herself. It is known for its cosmetic products that are naturally made and environment-friendly.

These organically products is used by different women across the globe, and different products with different functions composed by the ingredients that come from different countries. (Ex: sesame seed from Nicaragua, shea butter from Gnana, coco milk, mangoes, strawberries, etc). Those ingredients are kept on improving along with the new ingredients.

Price

The products are priced more exclusively than the mass merchandised cosmetics, but well under exclusive department store lines. We can conclude from here that the company has sufficient information about the customer’s prices – company knows exactly its target group and knows what the target group is willing to pay, so the products actually are comparatively cheap; which means, still, there are lots of people can afford them.

Place

The company is B2C related which means that its target group is consumers on the B2C market. They use a mixture between intensive and selective distribution. All the shops are run on a franchising basis. Their customers are willing to pay in high prices and are in the medium class or higher; so they put their store mostly at exclusive department store lines, big shopping centers, and located in major cities.

Promotion

The company is against promotion, so they don’t do business by promoting, but they have their own internet site, where you can see their selection of products. The unique thing about Body Shop’s promotion, it deviates from its fellow cosmetics line with regard to its advertisements. It never made use of famous celebrities nor supermodels to endorse its products. Furthermore, the characteristics those models posses are far from the stereotypical model or from the Western standards. If we are to access the Body Shop International’s website, as cited in this paper, we will find out that these models are black. From this we can derive that the pioneer of Body Shop ventures into something that is more than just business. There is politics behind. The cosmetic business is bound by principle.

Hazard Management

The body shop provides safety to its customers. The products itself are naturally made and environmental friendly. They are against animal testing. So the company supports animal and human rights, and the economically climate. In October 2009, the Body Shop was awarded a ‘Lifetime Achievement Award’ by the RSPCA in Britain, in recognition of its uncompromised policy which ensures ingredients are not tested by its suppliers. Note that the promise of not testing on animals has no bearing on whether the ingredients are from animal sources.

They are unique with the outlet decoration. The Body Shop’s corporate identity provided a consistent visual cue in its shops. The company’s original shop interior concept, nicknamed the “green box” was developed to complement the corporate image. It featured a dark green modular system constructed in timber, and dark green tones on both the exterior and interior.

Conclusion

Lessons learned from The Body Shop’s success:

  • Authenticity adds value
  • The importance of staff selection
  • Globalization can lead to greater success
  • Don’t confuse your personal strategies with business strategies. Here, a company must have clear strategies.
  • Advertising and marketing add value
  • Don’t underestimate your competition

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A PESTEL Analysis of Tesco Expansion Overseas

Tesco first launched their international expansion in 1994. After 11 years their sales have grown to contributing 20%(7 billion) of the total turnover has been from overseas sales. The success of Tesco expansion overseas has mainly been down to the strategy of seeking out new markets in an early growth stage. These markets have few and week competitors and lots of potential. Tesco expansion overseas has mainly been in Eastern Europe and the Far East. Tesco has set up in thirteen countries abroad so far, some of these include; Czech Republic, Malaysia, Poland, Republic of Ireland, Thailand and Turkey. This assignment will focus on Poland in Eastern Europe, Thailand and Malaysia of the Far East.

The assignment will undertake a PESTEL analysis of Tesco expansion overseas. Involving political, economical, social, technological, environmental and legal issues that effect Tesco.

There are many political factors that effect businesses. The main factors are legislation, government agencies and incentives put forward by the governments in order to attract investors. Investment incentives in Poland are very favourable for large companies such as Tesco. Polish government offers these incentives mainly to companies that invest more than 10 million. Some of these incentives that the Polish government offer Tesco are, employment grants, training grants and grants for infrastructure development. There may be problems to businesses through political unrest, which may result in civil unrest and violent crimes. This civil unrest and violence is a problem that Tesco has faced in the Far East. In December of 2001 an antitank missile hit the office of EL AL Israel Airline.

However the Thai authorities believed that the target was a Tesco building adjacent that had received numerous bomb threats previous. The government may also be taking action against businesses in order to protect their economy. The government of Malaysia has recently taken action against the large investors in the retail sector. They have recently put a five year ban on any new hypermarkets being build in the countries top three cities Kuala Lumpur, Penang and Juhor Bahru. The Malaysian government have also stated that they are concerned with the negative affect that Tesco may have on the economy. As a result they have stated that any new hypermarkets that are being planned, are to submit their plans two years in advance. They have also required a socio-economical study to be carried out in advance. This has effect Tesco strategy as they may have to result in building smaller stores where there range is less.

Economic factors are those that affect the purchasing and spending habits of the consumer. When the economy is decreasing there will be less disposable income and consumer spending will decrease. Even though the countries economy is low, it does not mean businesses cannot benefit if the right strategy is deployed. With the right strategy businesses may be able to gain market share and increase turnover. Despite Thailand’s uneasy economic future Tesco has decide to invest more capital into their partnership with Lotus.

However, Tesco-lotus has shifted their strategy towards the development of smaller projects in downtown areas. This is due to the current economic environment as there is less risk in development small-scale retail stores. This is because they require small budgets and have a decreased breakeven time compared to hypermarkets. Other economical factors are those of unemployment, however companies can exploit these. If a country has a high unemployment rate then they may offer great incentives. The polish government offers companies such incentives as;

  • Reimbursing the cost of high ring an unemployed person for up to twelve months.
  • Reimbursing up to 50% of the cost of training employees

Tesco can take advantages of such incentives when employing Polish staff as it has invested over 10 million pounds.

Sociological factors are those that affect the business through the people of the country. Income distribution is a sociological factor; if there are a high percentage of people with a low level of income there will be a large market for inferior goods. In Thailand there is a large class divide between high-level income and low-level income. To control the effects of this divide the Thai government have create legislation that states that brands of prestige must have the same amount of advertising of those of inferior goods. Tesco has adhered to this through the amount of shelving space allowed for products. Another factor that affects business through sociology is that of the attitudes in which the population has on such aspects as work and leisure.

Businesses need to take into account that different countries will have different attitudes. In Poland where the population is mainly of Roman Catholic belief, leftwing political parties have accused Tesco of undermining the traditional Polish values of home, family and church. These views have mainly come from the poorer rural population who are suspicious of foreign investors. Mobility of the population is also important. If the countries population is less mobile, then the retail outlets of goods must be near to the most densely populated area. In Thailand Tesco has started to focus more on smaller convince stores that will be situated closely to the customer.

The technological environment is very important for businesses as it can increase efficiency and decrease costs. Technological advancement is import for many governments as it encourages development and new opportunities. The Thai government have praised Tesco for the use technology in environmental issues. Tesco Lotus has achieved increased energy efficiency through technological advancement in chillers plant operation and air conditioning unit. Tesco has created a more efficient operation that lowers energy consumption and emissions into the atmosphere. Other technological factors include discovery and development of new technology. This may help companies with efficiency and may help businesses to enter new markets. Tesco had already launched its .com operation in the UK and had become rather successful. They then in turn took this new technological idea and brought it to Thailand. Thus creating a new market and higher revenues.

Technological development means that businesses can better themselves, making them more efficient and can decrease costs. Tesco has recently proposed to use RFID (radio frequency identification), these new tags will allow Tesco to monitor their products development through the supply chain. This will allow Tesco to monitor their temperatures more effectively. The temperature monitoring is important as it is through the supply chain where most of the salmonella outbreaks occur. Another development that Tesco has recently been apart of is a new IT system named the Intactix space planner. This will allow the planning team of new stores to be more productive. The space planner uses 3D technology to create planners for store and shelving layout.

Environmental factors have become increasingly important over time. Environmental factors pose worldwide issues for businesses. Businesses need to be aware of two major factors when looking at the environment. Firstly is the usage of raw materials. Energy used by all businesses is mainly arises from fossil fuels which are running out at a high rate. Companies may also need to look at other aspects of material such as water usage. Which is already a problem in some US states. Tesco Lotus has taken large steps to combat their raw material and energy usage. Tesco lotus has created their first ‘Green Store’. This ‘Green Store’ is said to be leading the way in energy conservation and environmental management in the retail section. Some of the key features of the green store include:

  • Solar Panel Lighting System
  • Reduced heat radiation – through extensive use of natural light
  • The recycling of rain water as well system water
  • Non lead paint
  • CFC free refrigerators
  • A totally asbestos free site

Another key issue with the environment is pollution. Businesses need to be aware of the consequences of their actions on the environment. Many businesses today have started taking the effect on the environment very seriously and are introducing policies of recycling and lowering of emissions. These energy efficient policies can also save the company money in costs. Tesco Lotus reduced surplus airflow of the air conditioning unit, which lowers the electricity usage and saved the company 2 million baht. Further electricity usage reductions were made by reducing the lighting intensity by 20% which saved an overall 30% of the electricity bill saving the company over 12 million baht. Tesco is also trying to cut down on transport emissions through usage of railway systems. This allows fast economical usage of systems already in place. However the problems with sub contracting is the lack of control in which businesses have over the contractors.

The final stage of the analysis is Legal. Legal issues can interlink heavily with political. These issues that affect the business are those in which the business must comply with. Businesses must comply with government rules and regulations concerning areas like health and safety and product safety. Tesco product safety remains heavily on their chilled items, such as meat and dairy. To combat any area of salmonella poisoning they have created a system called the cold chain. This allows a product to be out of a refrigerated environment for no more than twenty minutes. If Tesco were found to be a course of an outbreak then there would be large consequences. Employment law is another issue that affects Tesco.

In different countries there are different laws. Tesco will have to adhere to laws such as rate of pay and employee conditions. Tesco Lotus has just failed to win a court case involving paying their workers over time on bank holidays. Tesco were seen to be outside the employee law and therefore were ordered to pay their workers a total of 35 million baht to a total of 8500 employees. There has also been inquest in the allegations of Tesco suppliers of forcing suppliers to sell their produce below cost. Tesco has also been accused of charging suppliers fees in order to sell their products. The Thai government have stated that these unethical business strategies are not welcome.

In my view the most important factors are those of the political and technological. Political problems plague companies looking to expand aboard as they have a large control of what companies can and cannot do. Technological factors are also extremely important as technological advancement can mean efficiency and being able to sustain any competition.

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Retailing in China

Therefore, the aim of the present study is to work out a high-level plan of successful localization trainees. By analyzing the status quo of Chinese retail market and the current situation of transnational retailers in China (including the case study of Careful), this paper explores how consumer behavior, culture and government roles can affect the localization strategy and creates a list of formats for successful localization strategies. The paper proceeds in four sections.

First, the concept of retailing localization (3 layers of localization) is Introduced as an antidote to the deficiencies of the prevailing study approaches to transnational retailing. One background sections hen follow. While the first part charts the status quo of Chinese retailing market and the rapid growth of transnational retailing, the second profiles the opportunities and threats transnational retailers face in the process of localization.

Then, by studying the case of Careful (China), the strategy analysis of localization in China for transnational retailers is profiled, including the analysis of the 3 layers of localization – namely localizing the strengths, localizing the products and operational system (ups) and localizing management and corporate cultural (PEP). Finally, the wider implications of this study for transnational retailers in the process of localization are put forward in the concluding section. 1. Introduction 1. 1 The Problem and the Study Objective Admit it or not, the relationship between transnational giant retailers and China has become a love-hate one.

On one hand, China Is virtually any retailer’s largest opportunity for growth In the 21 SST century. With its booming economy, fast growing domestic markets and untapped talent base, China offers massive business opportunities and great strategic importance for retail companies all over the world. A large and growing consumer base of 1. Billion people. National retail sales reached some 837$ billion in 2005 with an increase of 12. 9% over 2004 It is estimated that national retail sales will exceed some 1250$ billion in 2010. Source: http://www. Showbiz. Com. CNN/ SMS. PH? Org=show=33431 =l On the other, China’s unique cultural, business, and political environments pose significant challenges to transnational retailing operations that require a high degree of localization. Based on the fact that the localization of retailing Is much more complicated and comprehensive than other Industries, retailers usually find themselves puzzled and bewildered 1 n China. Indeed, many retailers have fallen prey to these challenges in the past 10 years AT operations In canal toners nave Eden unrolling extreme narrators In ten process of localization.

The concrete causes of their problems vary. However, one common underlying characteristic is that they all, to some extent, failed to conduct successful localization strategies. The initial objective of this paper is to look at the problems retailers have encountered and explore the flaws in their localization strategies. The present study has one more objective: to work out a solution to a racial problem about how the transnational retailers can deal with the socio- cultural differences in China and conduct successful localization strategies.

On the surface, these challenges appear difficult to overcome; yet, when we study the case of the multinational retailing corporations operating in China today, it is evident that some have achieved exceptional success based on their well-developed localization strategies. The experiences of these successful companies can be mined to create a list of formats which can help diagnose localization blunders of transnational retailers in China. Thanks to my internship experience with Chuan as Sale Management Trainee, I have been able to investigate retailing operations as an insider and had more profound understanding on this study. . 2 Current Study The uniqueness of Chinese retail market and the high demand of localization for retailing industry both in degree and content, make the research on the localization of transnational retailers in China an extremely interesting and meaningful one. While many previous researches have been focused on the localization of transnational corporations, only a few have explored the localizing strategies of retailing operation. Therefore, it is not an easy task to study the localization of retailing operations.

However, by referring to those previous studies in relating fields, I have been able to explore deeper about this subject. The study of this paper is based on a mixture of primary and secondary sources. This material is supported by critical examination of longitudinal data from annual reports, company documents, as well as scientific work of business magazines and web site. 2. Localization 2. 1 The Definition of Localization When a company conducts global expansion, it is surely to be involved into the process of communication with local customers.

It is therefore necessary for the company to get familiar with local culture, to study different customs, and to make proper adjustments to their strategies according to the varied response of customers. The executive of Careful once said 2 when doing market research in China that, “A store is a miniature of the country or city it locates in, so it should be adapted to the local environment. ” There are many definitions on localization from different angles. Some of them are based on cultural and linguistic context, some focus merely on localizing the products.

However, as for he definition of retailing localization which is a highly territory-embedded process, more practical and multidimensional view is required. Definition based on culture context According to the Localization Industry Standards Association (LISA), localization Involves: ‘alkali a product Ana making It linguistically Ana culturally appropriate to the target locale where it will be used and sold. ‘ 2. 3 Three Layers of Localization for Transnational Retailing 2. 31 Two Misconceptions of Localization A. When talking about localization, people usually focus merely on product or service.

Nevertheless, a successful localization strategy for retailing is much more complicated and comprehensive, including also the localization of operating system , management system ,even corporate culture and business ideas. B. A very important aspect of localization is usually ignored, that is, to bring in and localize the advantageous strengths of giant retailers. To retain their core values and stick to their distinct features are the requirements of localization for transnational retailers. In other words, localization and sticking to their uniqueness or strengths never contradict with each other.

Instead, a sound localization occurs under the precondition that the strengths are maintained and enhanced during the process of development and adjustment. 2. 32 Layer 1 : to Localize the Strength of Giant Retailers A. Strength of giant retailers When talking about the localizing of strengths, it is significant to identify the strengths of giant retailers in the first place. Giant retailers have achieved great success in the world market largely because of the competitive advantages developed over decades of operation. Indeed, marketing and distribution expertise adds value at foreign-owned detailing stores.

For Chinese consumers in particular, who are increasingly conscious about food safety and hygiene and getting sick with the environment of traditional Chinese markets, transnational retailers offer greater reassurance and a wider choice than traditional markets. ‘Compared with a Chinese supermarket, the service is better, the choice is wider, the food is fresher and they provide shuttle buses,’ said Yang Shaping, a retired woman who spends about 100 Yuan during her weekly shopping trip to Wall-Mart. (The Guardian, 25/3/2006) The strengths of giant retailers are listed as follows: a.

Abundant capital, their scale, a stable flow of finance and rapid turnover b. Advanced technology and advanced distribution, logistics systems c. Advanced marketing and management experience 3 d. Well-established global competitiveness, corporate image and culture B. Three phases of localize the strength While it is important to note that transnational giant retailer have their strengths , more attention should be paid to the localization of these strength due to the fact that no business idea or system can achieve success by simply copying unless they are made suitable to the local market environment.

Wall-Mart’s Cam’s Club is a good case in point: The most important feature of Cam’s Club is that it is located in the countryside. It has achieved great success in the United States, however, it turns out to be a total failure in the Chinese market because only a small proportion of Chinese people own private cars. What’s worse, the transportation system in China is far from well-developed. Consequently, city dwellers have difficult access to Cam’s Club located far away from their home. Realizing this problem, Wall-Mart soon decides to open stores in the cities to accommodate itself to the Chinese market.

To localize the strength, the first step is to bring in advanced technology and management system to a foreign market for that is exactly winner ten AAA value Lies In. I en Toweling step Is to accost tense strengths to certain economic and cultural environments. Next, after localization reaches certain degree, hopefully, this strength can be further developed. 2. 33 Layer 2: to Localize Product and Operational System According to Farley dictionary, retailing is the functions and activities involved in the sale of goods and services to consumers for their personal, family, or household use.

It is obvious that retailing as an industry has intense communication with consumers, the service retailers offer is, by large extent, to provide customers with products they need. Due to different culture, custom, demographics, different group of people in different region have varied tastes over products. Therefore, retailers have to make careful investigation and analysis into consumer behavior and preference in order to enhance consumer satisfactory. A thorough localization strategy in product structure is critical to transnational retailers.

As for sourcing, localizing the sourcing in local economy enable transnational retailers to meet needs of local customers and reduce delivery cost. Top retailers have come up with a series of advanced business modes and operation system during long time of operating experience. But this modes and system should be integrated into and modified with local environment and uniqueness, as explained above in the elaboration of the first layer of localization. 4 3. Retailing Transnational in China 3. The Status Quo of Chinese Retail Environment Like everything else in China these days, the change of retail market is at a spectacular speed and on a scale the world has never seen before. It is already one of the fastest expansions in retail history, but analysts say it could get faster as international giants race for territory in a $billion retail market that is growing at a double-digit pace. The domestic supermarket leader is Baling, with nearly 2 000 stores, and the foreign legion is led by Careful, which has 70 hypermarkets, eight supermarkets and more than 100 discount shops.

Wall-Mart currently has 56 megastars mostly in the southeast with about 30 000 employees. But even after it opens 20 more stores this year, its sales are unlikely to enter the top 10 of China’s major retailers. Germany’s Metro is the No. 4 foreign player, with 24 stores and another 40 within five years. Foreign investment has formerly been focused in Shanghai, Beijing, Sheen and other large eastern cities. But, as a sign of the growing power of Chinese consumption, many of the new shops are being opened in smaller cities. 3. Opportunity and Threat Analysis 3. 21 Opportunities for Retailing Transnational There is no shortage of incentives for foreign retailers in China. For many Chinese people, price is no longer the priority. Foreign retailers are also Telling It sealers to set up snoops Decease many restrictions n overseas firms were lifted in 2004 under China’s World Trade Organization commitments. A. The largest consumer market With a population of 1. 3 billion and massive markets, China is attracting intense interest from the world as a consumer market.

Over the past 20 years, retail sales in China have Jumped nearly 15% annually, to some $837 billion in 2005 making it the third-largest market on earth. The average annual income of China’s 1. 3 billion people is less than $1 500. But the middle class is growing fast particularly in eastern cities and it has enough disposable income to start focusing on brand, safety, quality and taste. Consumer demand for modern shopping environment Since the mid sass, the high demand for modern shopping environments in China has been growing due to the rapid economic growth and rising levels of affluence. And consumer expectations have shot up even faster.

Accompanied by the increase of purchasing power in China since then, both traditional supermarkets and department stores were not be able to meet the requirements of one-stop 5 shopping and shopping as leisure. Just a few years ago, most Chinese were content to line up in state-owned stores to buy whatever meager products were available, ND then shuffle off to unsanitary outdoor markets for meat, eggs, and vegetables. Now both local chains and the multinationals are pushing out the stodgy old state retailers and mom-and-pop shops by building big, convenient stores in central locations in Beijing, Shanghai, and Gunshot.

Huge mass retailers emerged by providing customers with a great variety of goods at low cost and one-stop shopping. Therefore, it is undoubted a golden time for retailers to enter a market that shows great assurance to them. For example, Macro from the Netherlands first entered Taiwan and quickly captured more than 30% market share in 1989. B. The change of policy from a protectionist orientation toward liberalizing In keeping with the conditions for China’s membership in the World Trade Organization, Beijing on Deck. 1, 2004 lifted most restrictions on foreign retailers. Gone are limits on the number of stores, rules confining them to large cities, and regulations capping the foreigners’ stake in local ventures at 65%. C. Regional advantages of Chinese market Cheep and sufficient labor resources: with its vast population, China is always able to provide transnational retailers with abundant labor force which requires relatively low ages. Moreover, Chinese employees are far more reliable than their counterpart in the host countries of international giant retailers.

Cheap merchandises: the cost of many products in China is much less than in developed countries because of the cheap labor, which allows transnational retailers to make reasonable sourcing decisions both in China and the world. 3. 22 Threats for Retailing Transnational Given all the opportunities presented by China’s growth, many NC retailers are eager to gain access to this market. The country unique traditions, history, culture, and overspent policies, altogether mean that doing business in China can be a complicated and time-consuming undertaking.

Foreign retailers interested in gaining access to China face lots of challenges which they must attempt to solve or they will turn away. A. Intense competition from both transnational and domestic companies Competition from transnational companies There has always being fierce competition Detente gallant retailers In ten essences market; no one wants to De lagged Denver. As Tiff Gill, senior manager of the Kurt Salmon Associates Consultancy said, ‘All the big players are engaged in a turf war. It is about being first and getting as much coverage in as many cities as possible.

This is a period of very aggressive growth. We are bordering the top end of the curve. But there is a possibility that investment could grow even faster. ‘(The Guardian, March 25, 2006) Many U. S. And foreign retailers are accelerating their investments in China, spurred by further easing of government restrictions and the allure of the world’s fastest-growing consumer market. These giant retailers are engaging in fierce competition, opening many new stores in order to take advantage of the high rates of growth in this segment of the detail market 6 B is also pushing hard.

The British firm’s owner, Kingfisher, plans to increase the number of its stores in China from 49 to 100 by 2010. Kea has also caught the expansion bug. For several years, it has had only two superstores in China, but it plans to open two a year from now on. Competition from Chinese domestic companies Chinese sellers have the edge over foreign rivals, strengthening their presence more rapidly at lower expenditures. Their understanding of the local market and well-developed sales networks enable domestic retailers to respond more quickly and react more flexibly to market changes.

With the foreigners attacking their home turf, Chinese retailers are fighting back. Take China Resources Enterprise Ltd. , which operates more than 1,700 supermarkets and hypermarkets, including China Resources Vanguard stores for example, the retailer has trimmed its staff to boost profitability, and has sought to improve management by raiding the foreign chains. Today nearly half of the middle and senior managers in Acre’s retail unit used to work at foreign-owned stores. Those foreign-trained managers have brought in marketing expertise.

For instance, to build brand loyalty, CREE rewards frequent shoppers with discounts, and the company has lolled out more than 60 private-label products, including bottled water, shampoo, and body lotion. And CREE is moving upscale. The company this year expects to open four “lifestyle” stores offering higher-end products. Plans call for an additional 20 such stores within three years. Chinese government’s ultimate goal is to create a dozen or so big local players that will be strong enough to compete with the multinationals at home and expand overseas.

It is not possible for the Chinese government to allow foreign retailers to take the dominant position in the Chinese market. B. Diversified consumer behavior Chinese people have their own unique characteristics, considerably different from, sometimes contrary to, that of Westerners. Consequently, Chinese consumers have their unique buying behavior, buying motive, their preference on merchandise and taste on design etc. Therefore, the marketing strategy to penetrate Chinese market should be tailored to these Chinese characteristics. Unique Chinese characteristics * Chinese adapted to catering to authority and to harmonize with others. Chinese have more interest In unman Telling Ana mementos than clientele or logical concerns. In terms AT KICK read, literary books rate more highly than scientific books, compared with westerners. 2003:128-161) Chinese culture is built on trust, relationships, and mutual respect. * Negotiations are normally bottom-up and informal. (Comfort, J. 2001 : 23-26) *The concept of face’ is very important Avoiding action that could be perceived as anti-china, coercive, or condescending. Chinese purchasing behavior and recent trends * The Chinese display a strong suspicion of cheap products combined with a desire for bargains.

The typical Chinese shopper engages in habitual comparison shopping rather than 7 impulse buying, typified by the saying, ‘Never make a purchase until you have compared three shops. ‘ Nevertheless, shoppers quickly snap up items perceived to be bargains. * Generally speaking, Chinese are fickle customers with little brand loyalty. (Kate-if, lee 2003: 10-13) When selecting purchases, the Chinese tend to attach more importance to the reputation of the item among the community they belong to, such as colleagues, friends, neighbors than to the performance of the goods or how well they suit their lifestyle.

Thus, penetration of all communities is important for successful marketing in China. * Laying great emphasis on freshness f food: * There are also numerous new trends for Chinese consumer, which makes it difficult for overseas retailers to sensor and follow. A. Being increasingly conscious about food health and hygiene b. Issues of obesity and nutrition amongst children are also of increasing concern. Double-digit growth in the fast food and snack industries, changing lifestyles and a uniquely Chinese legacy – the one child policy -? are key drivers. C.

Concerns focused on environment, safety have accelerated in the wake of CARS, avian flu and widespread pollution, prompting a wider consciousness about product safety – from ice cream to I-pods. And, while perhaps sporadic and not yet conscious, a linkage between consumer rights and wider environmental concerns is beginning to emerge. D. While still evolving, the expression of consumer rights in China marks an important stage on the road to a greater collective social conscience, which, for so long, has opted to be quietly oppressed by those in authority. 4. Localizing the Strength Giant retailers have all establish a prestige during long time of operation. Yet, in China they may encounter unexpected situation result from the uniqueness of Chinese market. Consequently, retailers should be clear about what detergents can remain effective and what should be changed and localized. While Careful draws on its network system in its global operations (e. G. For certain IT and logistical systems), most aspects of its activities are strategically localized to meet the specific characteristics and needs of the Chinese market and its business, political and consumer cultures.

Generally speaking, the key success factors for Careful, which are applied worldwide, are: one-stop shopping, extremely low prices, full range of choices, self-service, and free parking. These factors can be viewed as the strength of Careful. To remain competitive in China, Careful bought in these strengths with her, adopting flexible two-stage philosophy to localize her long-established strength and achieve stable growth. At the 1st stage, to enable branch stores to smoothly operate as fast as possible and to maintain high turnover.

Meanwhile, to decentralized authority of set-up branches to link with community development that Totally leads ten Increases AT local tax, employment Ana Turner proselytes AT communities, Careful decides to set up a new store after the investigations of location, store space and neighboring purchasing power. For example, she built a whole-selling or green store in industrial region and a general retailing or blue store in residential ones in Taiwan. By adopting this strategy, Careful could capture both big and 8 small accounts in one shot and then grow much faster than her rivals in the early stage of market entry.

At the 2nd stage, Careful focuses on customers, personnel training and market channels. She gradually enhances service quality, product innovation and emphasizes personnel cultivation. Frenchmen take the positions of top-level management constantly to infuse management philosophy of ‘serve customers’ and ‘action orientation’ into each store overseas. When walk into any stores of Careful, you will see many staff walk around to replenish stocks all the time. The manager in charge of a store also wanders around the store once it is open.

Careful further adopts strategic alliances to develop private label products to supply more offerings so as to meet the needs of one-stop shopping of Chinese people. At the same time, utilizing the system of commerce automation to centralize the purchasing matters of all stores, Careful could coordinate orderings, stock management and data processing for better control and decision-making. . 33 Public Relation In China, the localization of relation is the core of strategic localization. Chinese people pay special attention to the harmony of community.

To deal with ‘relation’ in China is a matter of delicacy to transnational retailers because, for one thing, the relation-business pattern is very much different from their operation in western countries; for another, it is essential to their success in the Chinese market. The most successful retailing companies have been willing to exchange short-term profits for long-term success, short-term employee productivity for long-term employee development, and short-term expedience for long-term government trust. Relation with government As a special Chinese characteristic, good government relationship is very important for companies.

The government is not only a major consumer (government procurement) , but it is also the main policy maker and opinion leader. Learning how government works and how to establish good relationships is a critical step. A foreign company that is considered a friend o government will be granted favors such as a heads-up on legislation changes or inside advice on how to do business. Conversely, a company that is deemed unfriendly will suffer consequences such as negative comments about its products or passage of laws that exclude it from doing certain business.

Getting on the wrong side of a key government agency can be disastrous. Interestingly, Carouser’s relationship with the Chinese government is a love-hate one. She has made full use of the loopholes in government regulation to dominate the Chinese market, while at the same promoting employment and improving living standard. Relation with Partners Careful is good at choosing and maintaining local partners. She is always n seek of experienced local retailers actively and establishing cooperation with them to get Tambala to ten local market as soon as poss. Ole Ana gain support In sourcing, human resources. 9 5.

Conclusion Further Implications for transnational retailers operating overseas Improving crisis management capacity When operating in foreign country, retailers are always confronted with problems. What transnational retailers need to do is to improve crisis management capacity. Take Wall-Mart’s bean curd crisis for example, instead of responding to the problem actively, it remained science long before giving a suitable explanation, which had ruined its image in Gudgeon seriously. When facing crisis, it is important to make quick response because silence may be interpreted as being indifferent and irresponsible by local consumers.

Then, active investigations should be carried out immediately to find the causes. Finally, the existing problems need to be solved as soon as possible. Shaping humane culture That most retailers prefer on- going promotions to attract new customers and retain old ones is totally different from everyday low price and no price promotion practices of Wall-Mart. An open and tolerating culture of Wall-Mart could endure over time because managements treat employees as their associates. They show respect to each other and share both profit and knowledge that lead to the creation of a harmony organizational climate.

Therefore, companies ought to develop themselves not as a workplace but a learning institution with the culture of caring and sharing. Combining sales channels Retailers could combine sales channels of physical stores and virtual ones to widen their accessibility to potential customers. The virtual shops could not only increase attention sales, but also accumulate market information for further investigation. Regarding localization as a two-way process Localization needs to be read as a potentially two-way process that is not simply about the transnational retailers adapting themselves to specific market conditions.

Certain retail formats and technologies developed in particular contexts may then be diffused to other country operations, including the home market. Samsung-Tests, for example, has developed an IT system that has subsequently been rolled-out across the company, and is currently home to a ‘global’ team working on e-commerce technology. The emergence of China will be the single most important economic event in the next decade. Along with it will come tremendous business opportunities, a large pool of talent, and many powerful companies.

The stakes are high for retailing company. If it fails, another company or product could become a Chinese national standard, its products could be excluded from government procurement, and its image could be destroyed. If it succeeds, it stands to gain sustainable and predictable profitability, win-win partnerships with the Chinese government and companies, and great employees from a pool of amazing talent. This paper describes a high-level plan of how to achieve this success by localization in China, by learning from other companies’ success and failures.

First, a company must localize 10 Localization strategy AT Remonstration Retailers In c in 3 layers. Then, these strategies should be adapted to unique Chinese characteristics. In addition, giant retailers needs to improve crisis management capacity, shape humane culture, and develop greater information system. By carrying out the proposed strategy of localization, retailing companies can realize their potential in China by assisting China to realize her potential in the 21st century. 11

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Eco-Final Paper

Planning and Operating Currently, we are In the middle of moving her photography studio from our home to a new downtown location. The new space Is over 1,500 square feet of studio space with a full basement for storage of props. With such a large space, she has decided to open a boutique store along with her new studio. She Is going to Incorporate the merchandise throughout her space so It still feels Like a studio, but items will be for sale throughout the store,’studio. She is going to be selling some of her most popular items that she uses for props.

Instead of buying props, outfits and boutique items for implies to use during the sessions, she is going offer a small boutique line that will be open during the week to the public. The boutique will be open Monday, Wednesday and Friday for shopping, and then she will be holding photo sessions on the weekends. The move will take her business to the next step. This new location will benefit her and it will benefit her pictures. Space is a must when you are working with children and larger groups in photography and this building has plenty of open space to catch all of those fun smiles.

This also gives back to the customers, It gives hem a more professional feeling when they show up for pictures. It will be a win for both the customers and the photographer. Market Structure The market structure for photographers would have be a pure competition as anyone can buy a camera and take photographs, but if you are looking for professional pictures or investment prints then you need to look for a professional photographer. If you ask around I am sure you will be able to find a handful of photographers. Many do this as a hobby, others do it for additional income without jumping all the way in.

You have the local department stores or grocery stores who offer photos for a small price ad then you have the professional photographers who have their own space and style. Once you get to this level I feel that they fall into the oligopoly. There are a limited number of quality photographers who have a price that is comparable to each other. To get to this level there are obstacles to overcome which makes the barriers to entry a little more complicated, Pricing and Non Pricing Strategies The main marketing tool for her photography business has been word of mouth. I Nils NAS Eden very positive Ana seen NAS a strong Toweling AT clients

Walt ten new location, she is going to be introducing a new referral program. With each order, she will provide eight referral cards to be handed out. For every referral that books a session and follows through with the session, the client who referred them will receive a $50 credit for future sessions/orders. She has also spent a lot of time researching print prices. Each photographer has there own strategy and style, but she has kept with an a-la-cart style with reasonable prices. Staying away from packages of prints or sheets of prints, this will allow each client to specifically order hat they want.

With a downtown presence, this will open the door for new prospects outside of word of mouth. While having regular hours, this will allow customers to come in and see her studio, see her photos that she has displayed and meet the photographer. This should create a more personal relationship with customers, the community and other downtown businesses. In Just the few days that we have been in painting two neighboring business have requested company photo sessions. Visibility of the store front is already paying off. Appropriate Course and Credit Market Photography is a luxury for individuals and families.

It is an art to be able to create a photograph that someone wants to purchase and frame in their home. Not every family wants to have a professional photo of their newborn baby, but the families who do will receive an assortment of pictures that they will cherish forever. This quality of service that a photographer provides has a price tag though. This profession has many different categories. If you want photos done by J Pennies or Wall Mart, you will be able to receive numerous photos for a small price. These photos re very generic and no time on editing is spent to make sure each photo is special.

As a personal photographers experience increases, their prices increase as well. They are selling an investment, a luxury item at a particular price. Her research on boutique items has brought another branch to her business. Her main focus will be baby boutique and she will offer mostly items for babies and small children. The boutique will offer wooden baby teething toys, diaper bags, baby clothing, baby leggings, specialized tote bags and specialized hair clips. Each of these items are airily inexpensive to make or buy so there will be a small outlay of inventory costs.

As a boutique shop with specialized products, prices will result in a comfortable net profit per item sold. This will be extra income as she plans to be in the studio during the week already. She will also have space to offer more of her products related to photography. She currently offers many different products for prints such as, mounted photos, canvases, stand out photos and a wooden mounted photo. She also offers baby announcement cards, holiday cards and Jewelry with photos. With the additional space in the studio, she will be able to showcase these products that will have the potential for increased sales.

Showcasing products to customers is a great way to have them visualize what they would want in their homes. Profit Maximizing Revenue will increase with any level of sales from the boutique as this will be an entirely new market for the business. Depending on how the items marketed sell, will determine what other item will be offered. As the seasons change, the clothing choices will follow suite. New items will continue to be introduced and marketed as e believe this is a great way to have customers continue to visit the store.

Changing merchandise wall create tramcar on a regular Oasis. A Tee ways to reduce ten price AT merchandise would be to develop and produce our own inventory or be able to purchase large quantities of inventory at one time. Since a boutique store is more known for having limited items, being able to purchase wisely or developing and producing boutique items will be the best alternative to reducing merchandise costs. Revenue Due to the fact that the boutique portion of the business is extra, any revenue hat is made on boutique products is a plus.

Her main focus is to continue to keep the photographer studio busy because taking pictures is what is going to pay the rent. On the boutique side, she is going to focus on developing different products and merchandise during the weekdays and will continue with her photography work on the weekends and weekday nights. With the limited hours during the weekday, she feels that she will be able to keep up with the local demand. When/if it reaches the level where an additional employee would be needed, we will look at the numbers to make sure it is Justified.

The longer we can keep the business within the family, the better and more profitable we will be. With the boutique items being made and bought from wholesalers, this will create a specialty market which will be difficult for another business to copy. Also with the specialty merchandise, this will warrant a higher price as creativity has a higher price tag. This along with her photography skills, these two businesses will go hand in hand. Each photographer has there own style, and with the creativity that she has will carry over into the .

Conclusion Overall, the photography business will be able to Justify the new space by itself; the boutique portion of the space will allow her creativity to be available to customers that are Just browsing or customers who have a scheduled photo session. No matter how you look at it, the exposure that the business will create by being downtown will be positive and will hopefully create a broader customer base. Reference McConnell, C. R. , Bruce, S. L. & Flynn, S. M (2009). Economics: Principle, problems, and policies (18th deed. ). New York: McGraw Hill/Larkin.

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