Discuss the below:
Answer below questions in points form by reading below case:-
1 You are the consultant employed by 2B. What information would you ask the management team to consider evaluating their international marketing strategy?
2 The management team is advocating setting up sales offices in these two countries. What other alternatives should they look at and why?
3 The majority of their production is moving to the Far East, principally China, for the clothes and Vietnam for the leather goods; what impact do you think this may have on their strategy?
Bill Chieftain
The Bill Chieftain brand of clothing originated in the 1960s and was best known for its buttoned-down, narrow-collared shirts that were beloved of the ‘Mods'. Throughout the 1970s and 1980s, they became part of the ‘uniform' of the skinheads and other groups of young men seeking to define their identity. By the 1990s, however, the company that made them in Ireland was suffering, like many of its competitors, from cheap, foreign competition and was struggling to survive. A white knight arrived in 1995 in the shape of 2B venture capitalists, which saw an opportunity to make the Bill Chieftain brand popular once more, and they bought the company. 2B employed a dynamic new management team who brought with them extensive experience of the fashion industry.
Over the following five years, sales and profits rose fivefold as the brand was extended into menswear, womenswear, shoes and other accessories. This was on the back of a successful campaign that highlighted the heritage of the brand. Practically all the sales came from the UK as the management team concentrated on developing the brand there. There always had been a small amount of sales abroad, particularly in Germany and the US, through small specialist retailers, catering to young men who followed the ‘skinhead' fashions.
In 2000 2B were reviewing their investments and asked the management team to put together a three-year plan. In order to continue with their investment in the company, 2B required that sales and profits be doubled to £200 million and £40 million respectively. The management team's response was to expand internationally, building on the business that they already had in their two main export markets of Germany and the US. Their reasoning was that these were two of the biggest markets in the world and they would only need to get a 1 per cent market share in both countries to achieve their targets. They also felt that they did not need to change their strategy, which was to exploit the ‘Britishness' of the brand and in particular to use the advertising that highlighted Bill Chieftain's appeal among young men of a certain type. They argued that as it had worked so well in the UK, it was bound to work elsewhere.
2B are not entirely convinced by the management team's arguments and decide to employ some external consultants to look at the strategy and advise whether 2B should continue their investment or sell up now.