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A Report On High Fashion Industry/business Investing In France Market

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By Author: Jason Taylor
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M&S is a seller of high fashion whose activities are mainly located in the UK. To expand its business, the company is considering investing in one of the EU countries. A study of the data shows that a potential market for M&S can be France, which has a good economic position and, as one of the European countries, can provide great benefits. However, the company may encounter major problems when entering a new country. Therefore, it is necessary to provide a report assessing business and country risks in order to understand the potential benefits of investing in France.
Methods/ Methodology
The main objective of the study is to assess the business and country risk related to investing in France of the company M&S. To do this, actual data will be used using methods such as SWOT and PESTLE analyzes. SWOT analysis includes the identification of risks through the analysis of internal and external factors that are key to the business. In particular, this will provide an opportunity to understand the strengths and weaknesses of the company, as well as the opportunities and threats that will ...
... allow you to have an idea of ​​the risks that M&S may face. In turn, the use of PESTLE is justified by the fact that it is considered to be a good way that can ensure coverage of all potential risks and problems associated with external business planning. That is, it will allow to assess the impact of political, economic, social, technological, legal and environmental factors in France that can affect the expanding M&S business. In this case, the usefulness of this method is that it can help avoid launching unsuccessful investments in the country through the development of an objective view of a new external environment. In general, these methods will allow to understand the nature of the business and country risks, which will make it possible to make the right decision regarding the expansion of the M&S business in France.
Strengths. One of the main strengths of M&S is the high brand awareness and value. The company has a great experience of 130 years where from the very beginning it has established itself as a quality manufacturer of fashionable clothes. At the moment, M&S is considered the largest British retailer and has a high degree of recognition and value among consumers. In addition, the company pays great attention to the quality of goods and consumer welfare, for which a plan was developed that involves active participation in problems related to the environment and sustainability of society as a whole. Thus, it distinguishes M&S from its competitors and positions itself as a supplier with high corporate values ​​that has customers loyalty and helps to sell brand products. Finally, another strength of the company is a wide range of products. Since M&S has its own product line and in various categories including shoes, clothes and underwear. In addition, using a high level of innovation in their creation, which allows us to offer good quality products. So, the company has many advantages to be successful in the high fashion business.
Weaknesses. The weakness of M&S is that the company is faced with difficult conditions in some European markets. Among them, Greece, Spain and Ireland, where as a result not simple trading conditions led to the fact that sales fell by 0,4%, while overall international revenues increased by 4,5% in 2013. Thus, this state of affairs may suggest negative consequences for M&S that can reduce the company’s revenues. In addition, another weakness of the supplier is the lack of production of goods for fashion-oriented buyers. Since despite the high quality of clothing, the design, size and style of the company’s products seem to be unsatisfactory recently. In addition to prices, companies such as Zara and H&M can provide products of similar quality, more fashionable and often cheaper. These weaknesses put M&S at a disadvantage and can reduce business growth.
Opportunities. One of the main opportunities that M&S has is expanding business into new markets. Currently, the main part of the company’s operations is in the UK, where the number of stores is 766, while in international markets they are equal to 418 units of which 155 are in Europe. In general, despite the failures of some EU markets, many countries in the region can still provide good opportunities for M&S. For example, as can see, opening a store in Paris produced a great success, where in the first few days the number of customers was over 80,000. Therefore, France can be considered as a potential market for the company’s investment in a country’s business that may be successful in the future. M&S also has the ability to increase the target market by focusing on the conformity of its products with fashion trends. This will increase the number of younger buyers, which will help increase the company’s revenue.
Threats. The factors that could harm M&S include high competition in the industry. In particular, the emergence of fast-fashion companies like Zara and H&M is becoming a significant threat. As they offer more budget products, unlike M&S, and with relatively good quality. On the other hand, there are also competitors such as John Lewis who directly compete with the company at a higher level. Thus, M&S is in the middle between such competitors, which may have a negative impact on its sales and requires from the supplier a more definite position in the market.
Political. The business environment of France as a potential market for M&S seems to be improving lately, aided by the countryэs political position. In particular, the president is striving to update economic relations in order to increase the amount of investment in the state, which in 2017 led to a surge of 4.4% . The greatest attention is paid to attracting international corporations from London, which indicates a great policy loyalty to companies such as M&S. In addition, political factors in France include new reforms aimed at attracting greater flexibility in the labor market, tax cuts for households and companies. The main ones include a single tax on income from financial investments, a reduction in property tax and a phased abolition of municipal tax. All this suggests that political factors in France are likely to contribute to the investment of the M&S business in a country that can also be successful in the future thanks to the interest of the government.
Economic. The economy of France is one of the highest in the world, which implies good hopes for business. In the previous year, the country ranked 7th in economic capacity, slightly lagging behind the UK (Import-Export Solutions, 2018). Its GDP is growing at around 1,7% annually, but as a consequence of the early economic crisis, France is struggling with a large public debt. In addition, there is still a high unemployment rate in the region, which in 2017 decreased from 10% to 9,5% due to political reforms. In general, France offers a highly skilled workforce where enterprises have the freedom to enter into an employment relationship. Also, for M&S, a significant factor is the fact that there is a large trade deficit in the country where imports predominate to a greater degree, and the export potential is very weak. This suggests that at the local level, the company will face relatively low competition, the main rivalry will be foreign manufacturers. Thus, despite some shortcomings in the French economy, in general, investing in a country’s business will have minimal risk, which is justified by its relative economic growth.
Social. By its social norms, France is close to the UK, which for MS can play a big role. This state is a secular country where any religious groups are not recognized and equality among the population is ensured. In addition, France has a good worldwide cultural reputation. In turn, at the level of society and markets, M&S brand products are perceived as exotic and therefore are successful among French women. Thus, the company’s products in this region are well known and popular, which suggests good investment opportunities where social factors can reduce country risks.
Technological. The speed of technology development can contribute to the success of M&S in France. Since the company pays high attention to development and innovation and therefore has its own digital laboratory that allows to create unique products for the market. While the French government is making every effort to promote innovation and attract technological innovations to the country. Accordingly, M&S will have enough opportunities for business development at a high technological level. For example, developing a widespread e-commerce in the region that can provide an opportunity for rapid business growth. Thus, this suggests that technological factors do not pose a threat to M&S investments.
Legal. Companies operating in Europe can benefit significantly from a single market among many countries of this union. For M&S, this means the free movement of goods across regions without high costs and export restrictions. However, the European market also implies that sellers must adhere to certain rules and regulations when selling goods in the single market. As the EU establishes regulatory requirements for companies that imply that products supplied to the market must comply with regulations to protect people’s health, the environment in general and consumer rights. In addition, according to the export rules, manufacturers must provide reports on the movement of goods and access to goods for customers regardless of the EU country where they are located. Thus, in this context, investing in France as a European country, M&S will have to adhere to all established norms. In this regard, at the present time, the company has successfully launched a French website that offers products in the local language, the usual method of payment and delivery. In addition, a high level of corporate responsibility, quality standards and a desire for a sustainable future reduce the likelihood of negative influence of these legal factors on the company’s operations.
Ecological. France is one of the states that adheres to a specific environmental policy. This implies a great desire to reduce environmental problems through government plans in this area. M&S, as one of the companies with a high level of corporate responsibility, has a position in accordance with French rules. That is, its adopted Plan A, which obliges a series of reforms in relation to the environment and sustainable consumer life, can reduce the level of risk associated with environmental factors. Therefore, in this case, this indicates a low degree of riskiness of the company’s investments in France.
Summing up, during the report business and country risks that M&S could face when investing a business in one of the EU countries were considered. Using SWOT analysis, it turned out that the company has such strengths as wide recognition and brand value, as well as high quality and a wide range of products. However, the company’s weaknesses include an under-fashioned design and trade problems with some EU countries. Therefore, M&S has the opportunity to expand to European markets such as France, which will increase its sales and reduce the threat from competitors. In addition, the PESTLE analysis as a whole showed that all external business factors of this country suggest good conditions for the supplier. Therefore, it can be said that France favors M&S investment the most as the risk level is low.

Author Jason Taylor researcher https://qualityessay.com/ and chief consultant at the National Institute for Strategic Studies

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