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Country, Industry and Competitor Analysis
This situation analysis focuses on the suitability of Marks and Spencer in Holland and the necessary factors the company has to take into account before venturing into this market. The market has several advantages, which Marks and Spencer can tap into given the level of success it has experienced in the UK.
The company can focus on developing a clothing product line that appeals to young, urbane and career individuals who are not afraid to try out new concepts. These products can be for both sexes with special focus being given to individuals of the ages 15 to 50 of both genders who are conscious of how they look and how people perceive them through their manner of dressing. The majority of the country’s population is aged 25 to 65 (Knijn & Rijken 2003, pp. 3-4).
This represents a good demographic range, which the company can profit from. It can also explore the jewellery market within the country and try to tap into the demand for the goods among the upper class of the Dutch society (Euromonitor 2010, p. 3). Marks and Spencer can position itself to target a market consisting of demographics ranging from the ages of 15 to 50 and develop a product line that meets the expectations of these demographics.
The company should focus on producing clothes, which can last both winter and summer for the targeted clients (Herbig 1997). This numbers represent the largest population in the country and they are likely to take up foreign concepts more easily (Hebig 1997, p. 46).
The industry in Holland is dominated mainly by HEMA, Vroom & Dreesman, De Bijenkorf and Maison de Bonneterie. These companies have several branches across the country and they are likely to create competition for M&S once it sets up its operations within the country. The companies offer various products within their areas of specialisation targeting their demographics.
V & D has over 62 departmental stores all over Holland, with clothing being one of the items that are on offer in these stores. The company targets the mass market for its products and this is shown by the many branches it has all over the country. The various clothes the company deals in are designed to meet the requirements of people of all ages regardless of their age.
The HEMA departmental stores are more than 400 in Holland alone and just like V & D the company has adopted the mass market model for selling its products (Euromonitor 2010, p. 3-7).
De Bijenkorf and Maison de Bonneterie are more specialised in their operations and they have their own specialised market segments, which they target. De Bijenkorf target market consists of high end fashion targeting men and women who have a refined taste in fashion. The range of clothes offered by this company targets clients who are urban and sophisticated, who crave for a unique experience in terms of the way they clad.
Moreover, De Bijenkorf ‘s target clients who are more sophisticated and who fall under the higher end segment of the Dutch society. This type of clients normally want to stand out from the crowd (De Bijenkorf 2012, p. 1). Maison De Bonneterie targets clients across the board though it offers a more general product range in comparison to De Bijenkorf.
The company has shops that target various clients, including men, women and children who like products that are general in nature (De Bonneterie 2012, p. 1). All these companies have claimed a share of the local market and Marks and Spencer should prepare itself for the tough competition within this market.
The customers that Marks and Spencer should target are those that have an urban appeal, who are more at ease with their looks. The ideal customer is one that has a sense of urban taste and who wants to be noticeable. Marks and Spencer should focus more on clothing, shoes and accessories in form of jewellery within its product range, which clients can purchase from its stores within the country (Wind, Douglas & Perlmutter 1973, p. 16).
The company can position itself as a leading location for products that target young and urbane people though it should not leave out products that appeal to the older generation and children, who constitute a significant portion of the Dutch society.
By doing so, the company can be able to create links within the country where it can have a great appeal across the different generations of consumers it targets. This can create avenues for the company to have a foothold within the market, which can make it achieve positive and higher returns (Bradley, 1998, p. 46).
The company can focus on carrying out a market research in the country to find out the products it can introduce to the market and the response these products are likely to generate. Marks and Spencer should weigh any barriers that may exist that may make the company’s entry into the Dutch market difficult (Porter 2008, pp. 1-3).
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The level of customer loyalty especially among those who purchase high end brands is significant within this market and as such, the company needs to come with a unique way of capturing the market share from the established brands. The level of customer behaviour can be analysed through the market segments and since 2009, the level of customer expenditure on non-essential goods within this country has diminished considerably.
Recession has had a deep impact on expenditure patterns in Holland. M&S should focus more on providing a general product range that appeals to urrban residents and the young market who constitute a considerable segment of the population (Paley 2005, p. 53).
The supplies that are to be sold can be sourced from other parts of Europe and from the country itself. Since the company is positioning itself to take advantage of the clothing market, it needs to have a variety of suppliers who can be able to deliver quality and affordable products. The Dutch society has had an increase in the number of first generation immigrants from North Africa, Turkey and other parts of the world (Douglas & Craig 1989, p. 78).
Therefore, the company can source products from companies that are in or outside Holland, which can serve this niche market. This product differentiation targeting specific segments of the society can have a bigger influence in determining the direction M&S takes in the country (Craig & Douglas 2000a, p. 85). The company can reap from such advantages that are likely to result from targeting the tastes of minority populations within the country and including a product range that can appeal to them.
Crucially, the Muslim population in the country has very specific tastes and the company can come with a strategy that captures this market as well. The company can offer jewellery products both for young and old Muslim women and recruit staff who are well versed with the needs of these women in the M&S retail outlets (Terpstra 1999, p. 68).
SWOT Analysis for M&S in Holland
The strengths, weaknesses, opportunities and threats that M&S is likely to face within this market are many. M&S can count on its image as a top-notch company that satisfies the needs of its clients through offering them products that are of a high quality. The company can count on its values of offering good customer service across the board as shown by the various awards it has managed to acquire in the UK, Europe and other parts of the world.
The company can also highlight the various corporate social responsibility activities it has participated in as one of the strengths that add value to its image (Campbell 2012, p. 1). The manager training the company’s staff is one of the best and this can also be highlighted as one of the strengths the company can bring into play.
One of the weaknesses the company should be aware of is the limited level of branding and segmentation of its clothing products. The company also has a weak stocking system, which has made some of its products to be unavailable to the clients within the stores when they need them (Cateora 1995, p. 54).
The company needs to exploit opportunities that are offered by the internet particularly through the social media networks such as Facebook and Twitter. Social networking sites provide essential platforms through which M&S can generate interest within the Netherlands regarding its product range that it intends to introduce to the market.
The company can also look at mutual business partnerships it can create within the country, which can be of great benefit in helping it reduce on the high costs that may be associated with the Dutch market. Partnerships in other towns in form of franchises can help M&S to understand the market dynamics of each market and the various strategies it can use to acquire a foothold (Ferell & Hartline 2011, p. 64).
Some of the threats that are likely to have an impact on the operations of M&S include the existing competition in this market in the form of HEMA and V&D, which have strong presence in the country. These companies have a large branch network with loyal clients and this is likely to be a major hiccup to its business venture in Holland.
The residential permit that is also one of the business requirements by the Dutch government to foreign investors is also one of the threats that the company needs to look at. This permit can be a great seatback for some of its staff, who may be sent in the country to perform their duties in some of the branches to that are to be based in Holland (Poelzl 2011, p. 1-2).
There is a shortage of land within the country since it is one of the most densely populated territories in the world. This is likely to be a drawback to the company especially if M&S is to construct some branches of its stores within the country from scratch. All these threats have a potential negative influence on the ability of the company to do business successfully in the country.
M & S needs to take care of these recommendations in the way it carries out its business within the country. The company has consistently distinguished itself by offering easy access to its stores and retail outlets over a long period of time. This is one of the areas that the company can avail its services in Holland by making clients have convenient access to its stores and retail outlets.
The company can also embrace online shopping and payments for its clients. This would make it possible for clients to save time and also avoid shoping in its retail outlets, which are likely to be very crowded especially at the point of sale. The ability of the company to offer delivery services at an additional cost to the client will also make their operations within Holland more flexible (Craig & Douglas 2000b, p. 78).
The company can consider introducing high end brands in some of its stores to cater for the high end niche market. This would make the company to have a brand appeal to both high and low income segments of the society, giving it an edge within the market in the country.
The M&S brands should show a dynamic shift to modern trends, which may have a stronger appeal to younger consumers who may be attracted by the strong ideals that are associated with the company. There should be a higher product differentiation in the product range offered by the company to give it a stronger foothold in the Dutch market (Subhash 1998, p. 56).
The company can consider franchising partnerships with some of the existing stores to save on its initial costs of entry. The company should embrace effective stock management policies within its stores. The company should utilize social media in generating interest among the younger generation. This would make more people familiar with its operations in the country.
Holland offers immense opportunities for Marks and Spencer, which the company can readily exploit. The company must therefore consider the unique aspects of the Dutch market as it seeks to expand its operations into the country. This would make it have a stronger share of the market.
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