Introduction
Uniqlo is ranked as the 1st apparel brand in Japan (Fast retailing, 2014) and the 5th SPA (Specialty Store Retailer of Private Apparel) in the world (VFPress, 2012). The brand has demonstrated a strong development during the past years with around 818 stores worldwide, estimated at August 2015, (Fast retailing, 2014) and now, they are planning for an expansion to Vietnam market. This report will provide useful information which can be guidelines for Uniqlo’s strategy to enter a new market. The report covers four main parts: PESTLE analysis of Vietnam market; mode of entry suggestion; segments, targets and position process and 7Ps marketing mix.
Question 1: PESTLE analysis of Vietnam market
1. Politics
Political decisions could
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Uniqlo is a company from Japan; it could easily take advantage of this political factor. Vietnam – Japan Economic Partnership Agreement signed in 2008 has brought opportunities for two countries’ businesses and consumers to “access capital sources, modern technology, materials and goods” effectively (Viet Trade Promotion Agency, n.d)
2. Economic
Economic bodies which constitute the external environment have certain influences on economic environment faced by organizations (Capon, 2009).
• It is expected that, in 2016, among the six major countries in ASEAN group, Vietnam would grow fastest (The Economist, 2015).
• Vietnam has been a member of WTO and a TTP trade agreement: these practices promote more competition and provide more mode of entry alternatives for new firms into Vietnam markets (KPMG, 2015).
• Private consumption is developing strongly; enhanced by increased consumer confidence and low inflation (Asian Develop Bank, 2015).
• Sales in retail sector increased 9.8% in January – September 2015 compared with previous year (Bloomberg,
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This promises potential target audience for an effective digital marketing strategy of Uniqlo.
5. Legal
According to Peng (2014, p.43) a country’s legal framework helps reduce “transaction cost by minimizing uncertainty and combating opportunism”
• Fair treatment for foreign investors are guaranteed by Vietnamese Government and the 2015 Enterprise and Investment Law has implemented favourable conditions for FDI sectors (Ernst & Young, 2015)
• These attempts of Vietnamese Government include overhauling the investment and intellectual property law, and simplifying business administrative procedures.
6. Environment
• Vietnam has tropical climate with annual average temperatures of 5°C-37°C (Global Security,
The emerging market, higher education and developing economy made the stability of job growth stronger than the fall forecasts. The trading has grown in the past few years and supported by investors, particularly among advanced and increased manufacturing output. A consistent with strong consumer confidence is the reason for the healthy final demand. The number of individuals in Los Angeles filing initial unemployment insurance claims continued to decrease for the five consecutive years, the longest streak since 1995 according to the local government and Department of Labor.
PESTLE analysis : Is a shortcut of six words which is political , Economic , Social , Technological , Legal and Environmental .Usually this concept used in marketing .Also it used as a tool by organization to track the environment they are operating in or are planning to new project or service .Moreover it used to assess the four external factors with regard to the situation of the organization's business ,and how it will effect in the business over long term. Political factors: This factor looks at how government regulations and legal issues affect a business's chance to be profitable and successful.
The South Vietnamese did not want to leave their country, but they have to because they could not get used to the ruling way of the Communists. After took over the country, the Communists started to confiscate the South Vietnamese properties, businesses, and sent the South Vietnamese to the re-education camp to brainwash and learn about the ideas of communism, or the South Vietnamese have to go work at “New Economics Zone” by the action of sent people away, it made separate many families. Not stopped by that, the Communists also changed the currency, it made the live of ordinary Vietnamese became more harsh. South Vietnam used to hold the top in the economic board of Southeast Asia at the moment. The victory of the Communists to the fall of Saigon made the live of ordinary Vietnamese became
Ngo Dinh Diem was a man who had been described by many different titles. This was due to the many different things which he had said and done in order to get where he wanted to get in his political career. Diem showed characteristics of being both a nationalist and an opportunist. This essay will seek to answer whether he was truly a nationalist or an opportunist through a thorough analysis of different sources.
Pestle Analysis Political Factor Eataly operates in global environment with their operation spread all around the globe; the operation of the company is influenced strongly by political situation of the country where they are doing business. As Eataly have flexible policies to adjust in an unstable economy (Reijers & Mansar, 2005). Economic Factors The entire planet has witnessed the economic decline and hence the characteristic of purchasing products has been greatly affected all companies without exception Eataly. In addition, the income level of Europe is relatively uneven which makes some people fail to pay for products offered by the company (Chaffey, 2009).
Since then the country has seen many wars mostly involving boarder issues with neighboring China. The country has been through many civil wars along with fighting enemies abroad at the same time. Vietnam was not on the radar of most powerful countries until the French Indochina war in the mid-nineteenth century. Then again, during the Second World War with the Japan Empire over taking Vietnam and forcing all that opposed to force labor to work for the Japan Empire’s war machine (Elanor Jane Sterling, 2007). After the turn of World War II, the country forced into yet again a civil war between the communist and the people’s republic of Vietnam.
We will now be doing a more detailed analysis on these six PESTEL factors. PESTEL refers to the Political, Economic, Social, Technological, Environmental and Legal forces,
Ideally, the outset that Ngo faced was not a pleasant one as the political field of the time was filled with criminals and political opponents that were particularly subverted in communism. The forces in Hanoi were mainly under the control of Ho Chi Minh, to whom had organized the population in a form of gangsterism, in means that he called insurance, in case the election did not sway that way that Ho had intended them too. Initially, the newly appointed Diem had been determined to deal with all of the set issues of the nation-state. When Diem had assumed power in the South, the nation-state was bankrupt and without the vital organs of government, due to the withdrawal of the French colonials, that had been the apparatus of the government in the area. Diem embarked on a regime of social reorganization, in a hope that it would disrupt the spread of communism in the area, and employ a better work ethic in the people in order to rebuild their economic standing in the world.
Vietnam has a very interesting climate as well, with fluctuating weather. There is a wet season in between May to September, which it rains almost everyday, or every other day. This causes lots of flooding, which makes the rivers rise and flood. This can be a good thing. After the water lowers, it leaves fresh and fertile silt for farmers, which is why many farmers tend to live near lakes.
. STUDY OF ENVIRONMENTAL FACTORS a. PEST Analysis: i. Political: L 'Oreal faced issues in the dermatology branch led by Galderma due to new legislations governing drugs. The EU law affects L 'Oreal and restricts their use of certain kinds of carcinogenic chemicals, such as Phthalates. L 'Oreal is obligated to produce safe products that do not contain any harmful substances.
Cultural briefing: Vietnam Are you interested in visiting Vietnam, a truly hidden gem of Asia? If so, prepare beforehand in order to be aware of some do’s and don’ts and have the best trip possible. Formality of dress in business (and pleasure) When preparing for the meeting, first choose your attire wisely. Business attire in Vietnam generally consists of a suit and tie for men and suit or dress for women.
2.0 Porter’s five forces of Levi’s Strauss Threat of new entrants – low • Entry into a market where the production volume is so high already is not really a threat because the cost of production goes down. • Levi’s can produce more at a lower price and possibly sell for more. Bargaining power of supplier – low • Competition within manufacturer is high since it is mass – produced. • Manufacturer is located in many third world countries: Central America, China, Cambodia therefore Levi’s can switch to other manufacturer easily.
The demand on labor from companies and factories was increased as increasing business. World Bank showed, ‘The GDP growth rate jumped to 11.1 percent from 1994 to 2000(World Bank, 2004:13).’ With the increased GDP, the Vietnamese solved the problems of food and clothing. The Vietnamese economy achieved its highest economic freedom score ever in the 2015 Index (The Heritage Foundation, 2015). However, there
PESTLE analysis is include of political, economic, social, technological, legal and environmental factors. PESTLE is a business tool that used by companies to track and analyse the macro environment in which the company operate. This tool is very useful which help in overall growth and development of organization after learning from the past mistake and working for future. The first factor is political factor which include such as law of land, taxation policies, rules and regulation, trade restriction and so on.
The aim of this assessment is to reflect on what I have learned this semester regarding the module of Business in Global Context; from the lectures with the professor, the case studies done in class and the three previous patchworks that we worked on. We have learned that there are different internal and external components that affect the business environment, from corporate social responsibility to cultural and institutional framework; organizations must take into consideration all the factors related to the different parts of its environment. For the topic discussion, I will be discussing globalization and how it has affected the global business environment along with the key aspects and the different point of views regarding it.