1.1 IntroductionSince Koyo Jeans current active g markets are China, Hong Kong, Spain and France; however researches have been able to find out Koyo was not going so well in terms of internationalisation and brand value, recognition in those current markets due to weak business strategy and poor understanding the market; so in such, this management brief will be focus on analysing and recommending a new market to enter, follow by suggestion on the entry mode for Koyo Jeans and by evaluating the countries attractiveness and advantages that can benefit to Koyo Jeans to operate in that country.
1.2 Environmental audit of current markets in China, Hong Kong, and France 1.2.1 Executive SummaryBase on the first assessment, refer to the PESTEL and Porter’s 5 Forces analysis (Appendix 6.1), the most attractiveness in China is the point of huge increasing population which have recorded 1,370,536,875 (National Bureau of Statistics of China 2012) on 2011.
And as one of the BRIC countries, China has also recorded a 7.4% of GDP growth rate in 2012 (Trading Economics 2012), which is an evidence showing China is a strong emerging market. Regard to the technology used, China has relatively lower penetration rate than the other two countries. But operating business in China has a lower cost than the other two countries, example as the labour cost.
Hong Kong is a SAR (Special Administrative Region) of China; but the whole political system is not the same as China, and it can enjoy highly autonomy. The education, political, socio-culture all aspects show this city is favourable to have businesses in. Most attractive fact is the highb penetration rate of internet users, as businesses can reach the customer widely.
France is the 5th worldwide in GDP 2012(Economy Watch 2012), and has a highest number of tourists (Touropia 2012); it has the attractiveness on large customer base. However it also got a huge number of competitors and operating in France is relatively higher cost due the average operating cost is higher than in China or Hong Kong.