Marketing Essay writing Question:
You are a clothing manufacturer in your country. Prepare a market entry strategy formal report for maketing it in a one of the following markets: China (PRC), India and Japan.
1. Analyze the environments of the above three different countries stating the best destination for exporting your product.
2. Environment screening of the above foreign markets.
3. Market entry strategy for enterihg ito one of the three foreign markets.

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Introduction

The world textile and clothing manufacturing industry includes textiles, clothing, luxury goods and footwear that has reached up to $2,560 in the year 2010 as per the report of Market Line. In the last few years the domestic cloth market has changed a lot and changed for the better; Output of the cloth manufacturing industry is enhanced for betterment, market size of the cloth market has also increased, and that has brought changes in the new ways of marketing has emerged that has initiated the cloth manufacturing companies to set up their new store chains or promoted them to raise many existing stores that has lead to shrink in import clothes (Textile Industry Overview 2004).

Competition in the international markets is also increasing that has led to the manufacturing of quality fabric and has even led the many manufacturing companies to produce the high quality and value ready made cloths for the local buyers. Through diverting the focus over the high value, a new wave of fashion shows has also helped the marketing of products in the market. The fabric industries in Asian countries are the focus spot in terms of growth. Beside the China and India, there are many fast rising economies such as Japan, which is in the consumer product companies’ radar. Therefore, in spite of the slow growth in the economy, there are new expansions in facilities in the Greater China and elsewhere are Asian countries that are coming into the stream for meeting the requirements of developing China, Japan, and Indian markets (Tomiyoshi 2010).

 Executive Summary

One of the fastest growing industries of the world in the cloth manufacturing industry, as the people are becoming conscious about the fashion and their clothes, many advancements and improvement as came into this industry. Clothing is also linked with the lifestyle and standard of the individual; therefore, it is the most promoted industries of the world. The study has been conducted in this regard. The report includes the study of the cloth manufacturing industry of the world in the context of three most growing markets in cloth, manufacturing which are: India, China, and Japan. The report as analyzed the market and environment of these countries for starting the cloth manufacturing business in this country. For analyzing the environment internal and external environment of these three countries in textile market is analyzed through the help of the two models which are: SWOT Analysis and PEST Analysis for analyzing the strength, weakness, threat and opportunities for the cloth manufacturers in these countries, so that they could easily operate their business activities and earn the large revenue.

The study has also included the market screening of these three countries, so that the appropriate recommendation could be provided in this regard that depicts the best country in opening the cloth manufacturing business, so that the manufacturers can earn the heavy revenue and lead to the growth of its business. Proper recommendations for selecting the best advantageous country is discussed in the reports and justification is also provided for proving the study that specific country is best in cloth manufacturing business.

Environment Analysis of China, India, and Japan

Environment Analysis of India

SWOT Analysis

Strength

• The biggest strength of India is its huge pool of cheap and talented workforce.
• India has got the wide domestic market consumption, due to its increasing population (Rao 2012).
• India has got the tremendous potential of export, cloth products is in demand among the various western countries.
• India has got the young risk taking and creative entrepreneurs.
• Cloth manufacturers in India use the latest technology that produces the highest quality fiber material.
• The most significant factor is the government support of the cloth manufacturers.

Weakness

• The major weakness is the increase in global competition in the cloth industry due to the World Trade organization policies (Sharma 2006).
• Low end suppliers use the outdated manufacturing technology that impacts the global market of India cloth manufacturing.
• India has the inefficient supply chain management; therefore, there is the urgent requirement for bringing improvements into it (Rao 2012).
• The cloth manufacturing sector is still unorganized in many levels in India and requires many government reforms.

Threats

• India faces the threat from the market of China; many experts have claimed that glorious day of china has gone but capability of Chinese exports to the supply of quality and value products could not be underestimated as they are providing their products at cheap rates (Singleton 1997).
• Textile exporters in India cannot afford the complacency and has to bring changes in global trade community.

Opportunities

• Many western countries are setting the various manufacturing units in India that open the wide array of opportunities for the stakeholders in the cloth manufacturing industry (Sharma 2006).
• As per the experts, the golden period of Chinese textile is over and base of production of international textiles is shifted from China and India to various other destinations that have low cost (Singleton 1997).

PEST Analysis

• Political- Cloth manufacturing industry in India account for 1/5^th of the total export earnings; government discriminated against the integrated textile mills with an objective of supporting the cottage handlooms, as most of the mills were closed. Mills produces the 4% of the total cloth manufacturing output. Despite of the assistance provided by the government handloom share in India is 18% of total output; the reaming is produced by power looms that are situated in sheds outside the mills (Sharma 2006).
• Economy- Indian cloth manufacturing industry or the textile industry is about 14% of the total industrial production, 4% of the India Gross Domestic product and 16.63% of the export earning comes from the textile industry. Near about 40% of the clothes that are produced within the country are exported to the various western and other countries. Textile industry is the second largest industry after agriculture in India. The textile sector has targeted the US $ 6 billion of FDI by the year 2015 for investing in the green field textile manufacturing units, garment manufacturing, and fabric manufacturing (Singleton 1997).
• Social- Through textile industries many people have got the opportunities for the employment and maintain their standard of living. It is expected that cloth manufacturing industry will provide 12 million jobs to the unemployed persons in 2012. People from different religious background lives in India; therefore, there is a huge scope of the cloth industry (Singleton 1997).
• Technology- Distribution and communication channel is spread in large part of the country; therefore, there is no transportation problem.  Latest technology machines and raw material are used in manufacturing the clothes (Sharma 2006).

Environment Analysis of China

SWOT Analysis

Strength

Chinese textile industry has large cheap labor resources and many quantities of resources for clothing production. Textile industry is the typical labor intensive industry in china. Cost of labor is on the crucial element in the production cost of clothes. As per the U.S. Wernevr International consulting organization china labor rate is 0.96 U.S$ per person per hour, that rank 48^th place, level of Japan is 1/37, U.S 1/20 that shows labor in China is highly competitive. China has the huge domestic market for textiles, due to the increasing population of the country (Pigott 2002).

Weakness

The main weak point of Chinese cloth manufacturing company sis the lack of education level of the employees; therefore, they are unable to understand the use of latest technology. Another weak point of the cloth manufacturing company is the inferior working environment in the country.

Threat

The cloth manufacturing companies face the threat due to the cancellation quota due to the increasing strong competition in the global market. Interest rate policy of RMB (RMB is currency in China and one Euro= nine RMB). The country also faces the severe threat from the economic crisis that impacted the many countries of the world (Brown, Waldron and Longworth 2005).

Opportunity

 Large companies have the opportunity to expand a small sized factory in China are bankrupt. China is focused over creating the new products for the customers that helps in creating their own brand. The country is always providing the creative products for their customers. Due to the demand of Chinese products are increasing in the world the country as the opportunity for increasing its productivity as the customer base is enhanced (Howe, Kueh and Ash 2003).

PEST Analysis

• Political- Employee rights in china has substantial impact on the business. As textile industry is labor intensive the effect of the employee laws are quite crucial. As a cloth manufacturing industry involves many chemicals, the government of china provides training to the employees so that they could properly handle the harmful chemicals and noise came from the machines. The government of China has removed the quota and trade barriers that have provided the competitive edge for the country by maturing the textile industry (Brown, Waldron and Longworth 2005).
• Economic- China has the strong economy and it is one of the fastest growing economies of the world that indicates the positive results for the consumer and business. Employment opportunities are increasing in China in the cloth manufacturing industry. The transportation facilities are good in China that also contributes in increasing the textile business in the country (Pigott 2002).
• Social- Many community’s people reside in China that adds the advantage for the country in increasing its production for the companies. People in China are fashion conscious that helps the country in developing more and more fashion apparels for the customers and export its products in other countries (Pigott 2002).
• Technology- Increase in automated machinery has led to the improvement in manufacturing and production of clothing products. Through adoption of innovative marketing techniques companies are promoting their products (Brown, Waldron and Longworth 2005).

Environment Analysis of Japan

SWOT Analysis

Strength

            Japanese textile industry uses the technological capabilities and open the door for more opportunities as they uses the advanced material in the manufacturing of the cloth such as carbon fiber  for manufacturing the fashion cloth, which is the most capable material for competing in the global market. Textile industry is the most attractive industry in the Japan that attracts large number of customers towards it. The country faces the three advantages in textile industry which is :  promotion of structural reform that is taking place in small and medium size cloth manufacturing companies next is technological capabilities and last is the promotion and expansion of international business (Barrie 2011).

Weakness

The major weak point of the country is the environmental conditions in the country. The country faces the problems due to the earthquake that impacts the cloth manufacturing business of the country. Due to the import surplus the country faces many economic problems that have impacted the earning of foreign currencies (Berkowitch 2000).

Threats

            The Japanese textile market is focused over its domestic market and has very less expansion in the global market. Decline in population has led the country to move towards the global market. Cloth manufacturing companies also face the problem due to the lack of resources in operating the business activities in the country (Barrie 2011).

Opportunity

            Many brands of Japanese are famous in the market that attracts large number of customers and open the market for international customers.  Fashion shows such as Japan Fashion Week in Tokyo strengthen the industry and brand and has supported in the important advertising opportunities for the country to promote its products all over the world.

PEST Analysis

• Political- The political conditions in Japan are favorable for Japan. The government of Japan promotes the textile industry and provides them aid for promoting its business and helps in expanding (McNamara 1995).
• Economic- For compensating with the stagnation of the textile divisions, many Japanese textile manufacturers are shifting the managerial resources towards the non-textile divisions that has the high potential of growth. Textile manufacturers are promoting the downsizing the unprofitable field of textile and transfer their production in the overseas countries, while the country is advancing towards the downstream industries. The country is investing in research and development in the cloth manufacturing industry in order to increase the productivity in the country (Barrie 2011).
• Social- Natural calamities impact the growth of the business and brought to the heavy loss in the country. A Series of disasters in Japan has struck the economy of Japan.
• Technology- Japan is the most advanced country in terms of the technological advancement. The cloth companies in Japan use the advanced machinery for producing the products in bulk, so that it could be exported to other global countries (Barrie 2011).

Environmental Screening Analysis

            Over the past few years the textile industry or the cloth market has been changed a lot, there has been a high increase in the cloth making output and there is also n increase in the size of the market, different ways of marketing has been adopted with the development of the new retail chains and stores which has been increased in their numbers and the import of the cloths as been decreased. With the high increase in the competition in the cloth market at the international level the companies has led to the production of the high value readymade cloths for the local buyers and with the new trends in the fashion industry is also helping the producers to market their products. With the increase in the level of income of the rural people in the Asian countries has also increased the demand for the clothing (Pigott 2002).

            There is a high growth in the textile and clothing industry in the Asian markets and countries like India; China has become the sweet spots for the growth. Even with the slowing down of the economies, new facilities expansions in greater china and India are coming on the main stream to meet the requirement of the clothing needs of the large Asian markets. The advancement in the technology and the innovations are the key drivers of growth in these cloth markets. This has also developed the fabric and personal care industries (Pigott 2002).

            Environmental screening of the Indian cloth and textile market shows that it is one of the leading textile market and industry in the world. Even when it is considered under the unorganized market place, the scenario has changed dramatically, after the liberalization of the economy. There is a high push to the Indian textile market which has become the largest market in the world. With the second largest population in the world and having religious background the market is wide with cheap labor large scope prevails in the market (Sharma 2006).

            Looking at the Chinese market even it has large population, the highest in the world even then there is a large textile market prevailing in this economy. China has the largest population and a large market for clothing but due to the prevalence of large market players and heavy exports of clothing there is a least scope for any outside manufacturer to survive in this market. China is famous for its cheap labor and high end technology by which it produces very cheap products which are highly competitive in the international market. Looking at the Chinese textile market there are several growth opportunities for the inland manufacturers with respect to supplying products in the domestic as well as the international market place. With the prevalence of the high end technology the Chinese market products are highly competitive in terms of quality and price which provides a high competition to the foreign firm, as per the market analysis it is difficult for the foreign firms to setup their plans in china and compete with the local players. Chins is a great exporter of the clothing and textile products to the other Asian markets (Pigott 2002).

            Analyzing the Japanese textile and clothing market it can be said that it was one of the leading industry in the year 1987, that earned large amount of foreign currencies by the way of exports but fell into the export surplus in the coming period. With the increase in the level of imports in the textile market of Japan since 1999, the imported accounted for around 60 % of the overall domestic textile market. With the sharp increase in the level of imports of the textile and clothing products by the year 1995, with the increase in the readymade garments and also the cloth imports the Japanese market has become a structurally depressed industry. After the wake of the massive earthquake and the tsunami in Japan, the apparel and clothing industry has been a high set forth. Though the industry has been affected for short term as compared to the automobile and electronic markets, even then the supply chain has fall out of the events. The sector has been stuck up due to the wide disaster and there is a slow growth in this sector. Most of the damage in the textile industry is due to the damage of the infrastructure which has affected large part of the inland nation and also interrupted the power interruptions, which have a high impact on the Japanese textile and clothing market (McNamara 1995).

Market Entry Recommendations and Justification

            From the above environmental analysis of the three nations i.e. Japan, India and china, it can be recommended that India seems to be the most lucrative market to enter. The market entry strategy that can be suggested to the clothing manufacturer is through the acquisition or takeover of some existing local firm in order to grab the existing market in the country. India is highly lucrative market to enter into as having the second largest population in the works and is also religious which affects the local textile and clothing market of the country.

 Looking at the current trends in the Indian textile market it has been expected that the textile industry of India is estimated to increase by us$60 billion by the end of 2012, from the current level of US$ 34.6 billion. This shows the expected increase in the growth of the market. It is recommended that the clothing manufacturer must enter India by looking at the growth expectations it can also be said that the cloth manufacturer can have the ready market due to the increase in the demand of clothing in the domestic and local market in India. The share of exports in the textile sector is also expected to increase in the coming period with the estimated increase in exports from 4 % to 7 % during 2012.

The total textile industry of clothing contributes to 14 % of the total industrial production of the economy and 4 % approx of the total GDP of the economy and also around 17 % of the overall country export earnings, this trends shows the expected increase in the level of textile and clothing market and the growth trends for the clothing manufacturer to enter the Indian market. The main factors that accounts for this decision or the reasons for this recommendation is that the Indian domestic consumption of clothing is huge, having a high export potential with high risk taking entrepreneurs (Sharma 2006).

 The use of high end technology is also the factor which assists in producing the high quality of cloth and availability of multi fiber raw material and cheap labor makes the economy desirable and lucrative business option to enter. There are supportive government policies related to the entry of textile firms by the way of acquisitions in the textile market which makes it more lucrative option for the foreign firms to initiate their business practices in this country. There is high competition in the market which makes it more and more appealing to the foreign manufacturers and with the high demand for the foreign materials and manufactured products this market becomes the favorite for the foreign cloth manufacturers (Sharma 2006).

            From the above analysis it can be concluded that there is a high growth potential in the Indian textile market for the foreign firms to initiate their business practices in this country. It can also be concluded that the Chinese market and the Indian market are large in the textile industry and sector but for the foreign firms Indian market is much more lucrative. With the increase in the demand for the clothing products in the Asian markets the Chinese and the Indian market has provided large supply of clothing to these markets.

            Thus it can be concluded that the clothing manufacturer must enter the Indian market in order to grow with pace and get the benefit of the easy to enter government policies related to the textile industry. The Indian market is large and high provides high potential to the foreign firms and also provide high demand for their products and goods.

MB17

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