Talbots Clothing Company: Market Entry Plan in Chinese Market

Table of Contents

1. Introduction

2. PART A Company & Industry Analysis
2.1. Company Overview
2.2. Chinese Clothing Industry

3. PART B Selection of Key Markets and Analysis
3.1. SWOT ANALYSIS

4. PART C- In Depth Market Analysis of Target EE Market
4.1. PESTLE ANALYSIS

5. PART D Entry Strategy Plan

6. Recommendations

7. Conclusions

References

1. Introduction

The main aim of this report is to propose a market entry strategy for an organization in an emerging economic market. The paper has chosen Talbots Womenwear company to expand in emerging economic market namely China market. The paper uses PESTEL method to examine the market and analyzes the current market situation using SWOT model and proposes a market entry strategy for the company.

2. PART A Company & Industry Analysis

2.1.Company Overview

The Talbots is an area of expertise in retailing and direct marketer of classic clothing of women's accessories and shoes. The firm mainly functions in Canada and the United States. It’s headquarter is located in Hingham, Massachusetts and nearly 9,096 employees work in this company, whereas 5,612 work as part-timers.This firm recorded earnings of $1,213.1 million during the fiscal year which completed in January 2011, which was considered a reduction of 1.8% in comparison to FY 2010. The functioning income of the firm was $31.4 million in FY 2011, in comparison to a functioning loss of nearly $8.7 million in FY 2010. Hence, the net income was estimated as $10.8 million in FY 2011, in comparison with the total loss of $29.4 million in FY 2010 (Talbots, 2013).

The Talbots is an area of expertise in retailing and direct marketer of classic clothing of women's accessories and shoes. The firm got into a contract with Li & Fung in the year 2009 in August and from that time Li & Fung has been the worldwide clothing sourcing agent of the company for most of its clothing. This assists the company in improving the geographic dispersal of its goods sourcing; decrease functional costs and increase its functional effectiveness. Nevertheless, low customer confidence and high rate of unemployment could unfavorably affect the requirement for the products of the Talbots (Anderson, 2010).

2.2.Chinese Clothing Industry

With the fast progress in current years, it has made China capable to have the biggest clothing industry across the globe. It is mostly because of the truth that China possesses a large and low-priced labor force as well as raw materials’ sufficient supply. Hence, the apparel is China’s one of the leader industries. China is the foremost exporter particularly in the field of fashion and plays a vital role in the economy of global textile. The causes for China to be the foremost exporter in the area of trend are because of massive inflows of foreign investment, low labor cost etc. European Union used to restrict business with China by putting protectionist policies; however the Multi Fiber Agreement ended in the year 2005 (Bradley, 2008).

The increment of new budding apparel exporting nations and the rise in costs of labor in the costal areas because of the enhanced living standards are risks to the apparel industry China. These modifications caused the clothing industry to get into in an intermediary phase in structural and geographical factors as well as institutional factors. The production in China is conquered by huge production of fundamental products, yet with altering customers’ demands this industry has had to slowly begin new technologies for manufacturing, designing and merchandising.. Wang, who is Chinese Textile Company’s marketing director states that it’s very easy for foreign firms to find and set up a relationship with subcontractors of China, because Chinese firm would like to draw foreign investment and carry out internationally. The companies of China are also competent to provide foreign investors what they have been searching for. It’s helpful to foreign investors as well as Chinese manufactures (Phizacklea, 2000).

3.PART B Selection of Key Markets and Analysis

The apparel and non-apparel of China and production market has faced strong, although decelerating, development from the year 2008. This market was expected to improve in the year 2012. The apparel and non-apparel of Chinese production market had complete incomes of $228.9 billion in the year 2011, which represented a compound yearly rate of growth of 12 percentages between the year 2007 and the year 2011 (Lam, 2006). In evaluation, the market of Japan declined with a CARC of -0.9 percentages, and the market of India showed growth with a CAGR of 11 percentages, over the same time, so as to reach individual values. The segment of non-apparel was the most lucrative offer of the market in the year 2011, with overall incomes of $119.6 billion, equal to 52.2 percentages of the overall value of the market. The segment of apparel contributed income of $109.3 billion in the year 2011. Somewhat, the markets of Japan will turn down with a CARC of -0.9 percentages, and the market of India will grow with a CAGR of 15 (Mayrhofer, 2004)

[...]