Global Expansion Strategy: U.S. Fashion Brand in China and France

The Situation and Business Objectives

The forces of globalization are generally credited with a major role in increasing organizations' access to countless resources. Due to market liberalization, for instance, large corporations are able to import cheap resources from various global regions and thereby compete through price leadership strategies. Another crucial characteristic of globalization is that it allows economic agents incremental access to larger customer markets — manufacturers can sell their products across numerous global regions and exponentially increase their revenues.

Miana Fashion is one company currently looking to expand its business outside the United States and benefit from the advantages offered by globalization. The company has been present within the American industry for just over ten years. Throughout this period, it has succeeded in forming a loyal customer base, satisfied with the high quality of its products, competitive prices, and the reputable and polite sales staff who meet customers in each of the company's five stores. Today, the organization's sales levels have declined as a result of the economic crisis, which has reduced customers' purchasing power. Nevertheless, the organization possesses sufficient financial resources and considers this slow period the most beneficial time to pursue growth strategies.

The managerial team at Miana Fashion has identified two desirable locations for business expansion: China and France. Each of these prospective locations is characterized by unique features that could determine either the success or the failure of Miana's international growth endeavors. The aim of this report is to conduct an analysis of these European and Asian markets in order to identify their compatibility with Miana's objectives.

Necessary Business Structure

In order for Miana's penetration of the two foreign markets to stand the best chance of success, it is necessary that the two foreign locations present as few barriers as possible. For instance, it is desirable for them to maintain legislation that does not impede the efficient operational activities of foreign investors. Examples include a lack of financial barriers — meaning that foreign investors are not required to pay excessive import duties when bringing goods into the destination country — as well as the lifting of any restrictions on commercial transactions.

Secondly, a general state of stability is required, referring primarily to the economic and political climate. A favorable economic climate translates into an enhanced ability for citizens to purchase various products, including those sold by Miana Fashion. Third, it is critically important for destination countries to possess strong and reliable infrastructure — including roads, airports, waterways, and other transportation facilities — which allow the American company to transport its merchandise efficiently. It is equally important for these countries to have strong technological infrastructure, enabling Miana's leadership to communicate effectively.

The final element to be highlighted here is the existence of genuine demand for Miana's products. Both China and France must possess customer markets that are interested in and financially able to purchase the company's items. It is imperative that both conditions be met simultaneously: individuals who are interested but lack purchasing power are not viable customers, nor are those who have the financial means but no real interest in the products.